Appeals court says US wrongly withheld highway funds to NY over immigrant licenses

Detailed summary

NEW YORK (AP) — The U.S. Transportation Department wrongly decided to withhold nearly $74 million in highway money from New York state after it refused to revoke nearly 33,000…

NEW YORK (AP) — The U.S. Transportation Department wrongly decided to withhold nearly $74 million in highway money from New York state after it refused to revoke nearly 33,000 questionable commercial driver’s licenses for immigrants when an audit revealed problems last year, a federal appeals court said Friday.

A three-judge panel of the 2nd U.S. Circuit Court of Appeals in Manhattan concluded in a written decision that the Federal Motor Carrier Safety Administration, an arm of the Transportation Department, acted in a manner that was “arbitrary, capricious, or contrary to law” when it penalized New York.

The appeals court said the state can’t be faulted for failing to cancel licenses when a commercial driver lost legal status to stay in the United States because rules that would require a cancellation were not in place at the time.

The licenses pertain to commercial vehicles such as trucks, trailers, limousines and buses.

New York Attorney General Letitia James complained when the lawsuit was filed in April that the federal government was unfairly holding back money the state needs to repair roads and bridges. New York Gov. Kathy Hochul in the spring called the federal cuts “devastating” and characterized them as “political payback.”

The Transportation Department said in a statement Friday that it makes no sense for states to let trucking licenses for foreign drivers stretch years beyond when they are legally in the U.S.

“We’ve put a stop to the madness to keep the driving public safe,” the statement said.

Hochul and James welcomed the ruling in a joint statement, calling it “a win for the millions of New Yorkers who rely on safe roads to travel” and for the “drivers who power our state’s economy.”

The Transportation Department began enforcing existing English language requirements for truckers in the summer of 2025. Concerns about truck driver qualifications took on more urgency after an August 2025 crash in Florida, when a truck driver was accused of performing an…

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