Federal action and political fallout

The U.S. Department of Transportation has moved to revoke the Commercial Driver’s Licenses of 17,000 non‑domiciled holders in California, a decision that has become a flashpoint between the Trump administration and California Governor Gavin Newsom, who is considered an early potential Democratic presidential candidate for 2028.

Transportation Secretary’s response

Transportation Secretary Sean Duffy publicly pressed the state, saying California and Governor Newsom had been implicated after denying wrongdoing for weeks. The DOT framed the revocations as a necessary enforcement step following its review of license issuance practices.

Court intervention and administrative stay

The D.C. Circuit Court of Appeals issued an order pausing enforcement of the non‑domiciled CDL restrictions and placed the rule on an "administrative stay" while it considers emergency motions. The court issued that instruction on Nov. 10, noting the stay is intended to allow time to review the requests and is not a determination on the merits.

Background of the rule and expected scope

The rule originates from an interim final regulation announced by Secretary Duffy in late September aimed at restricting issuance of non‑domiciled CDLs to foreign drivers. The DOT estimated the rule could remove roughly 194,000 non‑domiciled CDL holders from the industry if fully implemented.

Audit findings and safety concerns

Following an internal audit, the DOT concluded many of the questioned CDLs had been issued to drivers who were either in the United States illegally or had remained beyond the period they were authorized to work. Safety concerns have been amplified by several widely reported fatal truck crashes in Texas and Alabama during the past year, and a late‑year California crash that killed three people and involved a driver who was reportedly in the country illegally.

Industry outlook and analyst assessment

Transport analysts say the appellate stay creates uncertainty for carrier planning and market forecasts. Jason Seidl, a transport analyst at T.D. Cowen, warned that ambiguity around the court outcome blurs expectations for capacity and attrition into 2026 and 2027, and could limit near‑term upside for transport volumes.

Seidl highlighted these specific impacts:

• Potential effect on roughly 8% of the nation’s more than 700,000 active CDL‑issued drivers if the rule is ultimately enforced
• Near‑term delays to any capacity tightening that might have supported freight rates
• Disproportionate pressure on truckload brokers during the fourth quarter as gross margins already face headwinds

Legal timetable and operational uncertainty

The appeals court stay was prompted by litigation from parties affected by the rule, which argued the emergency authorization bypassed the usual notice-and-comment process. While the stay does not permanently strike down the rule, it may allow state driver licensing agencies to resume issuance and renewals of non‑domiciled CDLs while the court considers the challenge. Seidl said the appeals decision could take at least a few weeks, though the exact timeline remains unclear.

Calls for regulatory reform

In response to the audits and crash reports, industry groups have pushed for tighter standards. The American Trucking Associations sent a letter to congressional leaders urging stronger training, testing and licensing requirements for CDL holders.

ATA President and CEO Chris Spear warned that, despite heavy regulation in trucking, gaps in oversight and enforcement "threaten safety on our nation’s highways," and urged lawmakers to act to close those gaps.

Federal agencies and next steps

Both the DOT and the Federal Motor Carrier Safety Administration are expected to reiterate findings from recent audits that uncovered problems with non‑domiciled CDL issuance. The ultimate regulatory and market outcomes now hinge on the appellate court’s forthcoming decisions and any subsequent administrative or legislative responses.