SBTC Asks Court to Force FMCSA Decertification of New York, California CDLs

Can FMCSA be forced to decertify a state's CDL program?

The Small Business in Transportation Coalition (SBTC) filed briefs July 10, 2026, in the U.S. Court of Appeals for the District of Columbia Circuit asking the court to compel the Federal Motor Carrier Safety Administration (FMCSA) to decertify the commercial driver's license (CDL) programs of New York and California. The coalition argues that 49 U.S.C. §31312 makes decertification mandatory once the U.S. Department of Transportation (DOT) determines a state is in substantial noncompliance with federal CDL regulations.

The filings mark the next procedural step after the court docketed the case in June 2026. SBTC originally petitioned DOT on May 27, 2025, requesting decertification orders against both states. The coalition now argues DOT unlawfully delayed acting on that petition.

SBTC also asks the court to immediately suspend the CDL authority of both states until they are found to be in substantial compliance with federal law.

What the lawsuit argues

The central legal question is whether the word "shall" in 49 U.S.C. §31312 requires the transportation secretary to decertify a state once substantial noncompliance is determined, or whether the agency retains discretion over enforcement tools.

Greg Reed, a transportation attorney and partner at Hanson Bridgett LLP, said SBTC's argument rests largely on its interpretation of that single word in the statute. Reed believes DOT has multiple enforcement tools available and is not limited to decertification.

Transportation experts say the lawsuit faces long odds. The case is unprecedented in its attempt to force FMCSA to strip state CDL authority through court order.

Background: FMCSA found both states in substantial noncompliance

FMCSA previously determined that both New York and California were in substantial noncompliance with federal CDL standards. The agency's findings centered on the states' issuance of non-domiciled CDLs (commercial driver's licenses issued to drivers who are not legal residents of the issuing state).

SBTC filed its original petition in June 2026 asking the court to revoke both states' CDL authority after FMCSA made those noncompliance determinations.

The coalition represents small trucking companies and owner-operators. Its members compete for freight with carriers whose drivers hold CDLs from states SBTC argues are not following federal law.

What decertification would mean for carriers

If the court orders FMCSA to decertify New York or California, drivers holding CDLs from those states would lose their legal authority to operate commercial motor vehicles in interstate commerce. Carriers employing those drivers would face immediate compliance problems.

Decertification would also halt new CDL issuance in the affected states until they achieve substantial compliance with federal standards.

The immediate suspension SBTC requests would trigger the same consequences while the case proceeds.

The enforcement discretion question

The lawsuit turns on whether FMCSA must use its most severe enforcement tool (decertification) or whether the agency can choose less disruptive remedies when a state falls out of compliance.

DOT has historically used corrective action plans, compliance agreements, and withholding of federal highway funds to bring states back into compliance before resorting to decertification.

SBTC argues the statute's use of "shall" removes that discretion once substantial noncompliance is determined.

Recent state CDL program changes

Ohio revoked 1,200 non-domiciled CDLs in June 2026 and stopped issuing new licenses to foreign truckers after FMCSA tightened eligibility rules in September 2025. Idaho ended its non-domiciled CDL program effective July 2, 2026, requiring state residency for all new CDL applicants.

Those state actions followed FMCSA's narrowing of acceptable immigration documents for non-domiciled CDL applicants. The agency's enforcement focus on non-domiciled CDLs has driven multiple states to exit those programs entirely rather than risk noncompliance findings.

What carriers should verify now

Carriers employing drivers with New York or California CDLs should verify those licenses are domiciled (issued to legal residents of the state) rather than non-domiciled. Non-domiciled CDLs are at higher risk if the court orders any interim suspension.

Carriers should also confirm driver qualification files contain proof of legal residency in the CDL-issuing state. FMCSA audits increasingly scrutinize the residency documentation behind CDL issuance.

If you employ drivers holding non-domiciled CDLs from any state, review whether those states have announced program changes or revocations in the past 12 months. Multiple states have exited non-domiciled programs without advance notice to out-of-state license holders.

Next steps in the case

The D.C. Circuit Court of Appeals will now consider SBTC's arguments and DOT's response. The court has not set a hearing date or briefing schedule as of July 17, 2026.

Even if SBTC prevails on the legal question of whether decertification is mandatory, the court would still need to determine whether New York and California meet the statutory threshold of substantial noncompliance and whether DOT's delay in acting on the May 2025 petition was unlawful.

Transportation attorneys expect the case to take months to resolve. The immediate suspension request faces a higher bar because it would disrupt thousands of active CDL holders before the underlying legal questions are decided.