D.C. appeals court orders stay on non-domiciled CDL holders

A D.C. Court of Appeals court has paused non-domiciled Commercial Driver’s License (CDL). Its effect on issuance and renewals is unclear, however.

Although CDL issuances are likely to resume until that appellate court makes final decision, the timing is unclear.

The court ordered that the rule, which was expected to remove about 194,000 current non-domiciled CDL holders out of the trucking industry, be “administratively stayed,” pending further order of the court.

“The purpose of this administrative stay is to give the court sufficient opportunity to consider the emergency motions for stay pending review and should not be construed in any way as ruling on the merits of those motions,” the court wrote on Nov. 10.

The rule was created after Transportation Secretary Sean Duffy announced an interim final rule in late September to get a handle on states issuing non-domiciled CDLs to foreign drivers. Duffy called the truck driver situation “a national emergency.”

Following an audit, Duffy said the DOT determined that many of these CDLs were issued to drivers who were in the country illegally or for a period exceeding the time they were authorized to work in the United States. 

The appellate court ruling’s effect on truck driver capacity and attrition levels is delayed at best and impaired at worst pending that court decision, analysts said.

That ambiguity hurts carriers' bid prospects in 2026 and “muddies” transports' upside case, as the 2027 cycle outlook hinges on court decision particulars with no imminent demand help in the macro capacity truck driver situation, according to Jason Seidl, transport analyst for T.D. Cowen.

The D.C. Court of Appeals decision to stay enforcement of the Department of Transportation’s (DOT) non-domiciled CDL ban that was brought into effect in late September in response to a lawsuit from affected parties.

The pause is intended to give the Court time to examine the merits of the case aiming to block the measure under the pretext that the rule was implemented under emergency authorization without the typical comment and review period.

“While this does not constitute an outright scrapping of the rule, State Driver's Licensing Agencies (SDLAs) will likely be able to resume issuance/renewal of non-domiciled CDLs while the Court examines the case,” Seidl said in a note to investors.

Seidl said it is unclear how long the Appeals Court determination could take but said it could be a few weeks at the earliest.

That ambiguity adds more uncertainty to a trucking market that is depressed due to manufacturers’ slump in demand that has stretched into its third year. Seidl has predicted the tightening of issuance of CDL’s to non-domiciled truck drivers could affect as much as 8% of the more than 700,000 active CDL-issued drivers in this country.

“Potential court affirmation of the rule could still set the group up for a firmer '27 cycle but muddied legal waters likely slow the trajectory of capacity attrition somewhat and pushes benefits out,” Seidl said in a note to investors.

Truckload brokers would be most negatively impacted as the fourth quarter is already expected to absorb gross margin pressure, Seidl said. A canceled rule could dash hopes of corresponding spot opportunity.

Barring demand recovery (which does not appear imminent) the TL outlook now hinges on particulars of the appellate court decision, Seidl added.

The DOT as well as the Federal Motor Carrier Safety Administration (FMCSA) are likely to reiterate findings from recent audits uncovering vast problems with non-domiciled CDL issuance.

In light of several high-profile crashes involving unqualified drivers, the American Trucking Associations (ATA) recently sent a letter to congressional leaders today to urge them to enhance training, testing, and licensing standards for CDL-holders.

“Though commercial trucking is among the most heavily regulated industries in the United States, gaps in oversight, enforcement, and qualification requirements…threaten safety on our nation’s highways,” ATA President & CEO Chris Spear said in his letter to Congress.