D.C. Circuit Pause Forces FMCSA Back to the Drawing Board on Non-Domiciled CDL Rule

When FMCSA unveiled its Interim Final Rule (IFR) on non-domiciled commercial driver’s licenses in late September 2025, the agency portrayed it as an urgent safety measure—one that needed to take effect immediately, without the usual notice-and-comment process and without the statutory consultation with state licensing agencies. By sharply narrowing which foreign-domiciled drivers could obtain or renew a CDL in the United States, the rule had the potential to immediately reshape a fairly large segment of the driver workforce.

But less than two months later, the D.C. Circuit put a stop to that plan. In a strongly worded order issued November 13, 2025, the court granted an emergency stay blocking the IFR in its entirety, concluding that the challengers were likely to prevail on several of their claims.  And just days after that rebuke, the FMCSA signaled a dramatic shift in approach: rather than defending the IFR as-is, it filed a motion asking the court to hold the case in abeyance while the agency completes a full rulemaking and issues a final rule. 

The rapid sequence—from aggressive interim rule to appellate stay to agency retreat—has created uncertainty for carriers, drivers, and state licensing authorities alike. And while the IFR is frozen for now, its ripple effects are already being felt across the country.

The IFR and What It Tried to Accomplish

FMCSA framed its September IFR as a necessary correction to what it considered a long-standing loophole in CDL issuance. For years, states were permitted to issue non-domiciled CDLs to individuals who presented either an unexpired Employment Authorization Document or a foreign passport and Form I-94. The IFR discarded that structure entirely. Going forward, only individuals admitted under the H-2A, H-2B, or E-2 visa categories would be eligible for a CDL if they lacked U.S. domicile.

The practical effect of that change was sweeping. Drivers in nearly every other visa category—including many who had been legally living and working in the U.S. for long periods—would be categorically barred from entering or staying in the industry. FMCSA has described the rule as a safety measure, asserting that states could not reliably access foreign driving histories and that this posed an unacceptable risk.

But the agency also acknowledged, in the very same rule, that the data simply did not exist to show any measurable connection between a driver’s country of domicile and their safety performance in the U.S. As it turns out, this was a problem for the IFR.

The Legal Challenge and the Court’s Response

Those discrepancies formed a major part of the challenges filed with the D.C. Circuit by individual drivers, industry groups, and King County, Washington. And when the court evaluated the request for an emergency stay, it found the challengers’ arguments compelling enough to stay the effect of the IFR pending further review.

The panel identified three central problems with the IFR. First, FMCSA admitted in the rulemaking that federal law requires consultation with the states before prescribing CDL-related standards, but the agency simply decided that consultation was “not practicable.” The court noted that the statute contains no such exception.

Second, the agency’s justification for skipping notice-and-comment rulemaking—the “good cause” exception—rested on a set of assumptions the court found tenuous. FMCSA warned that announcing the proposed rule in advance would trigger a surge of last-minute applications, yet offered only limited evidence for that prediction, and at the same time acknowledged the absence of data showing that non-domiciled drivers actually pose heightened risks.

Third, the court concluded that the rule was likely arbitrary and capricious because the agency failed to reconcile its safety claims with its own data and gave insufficient consideration to the serious reliance interests of drivers who would lose their livelihoods overnight. The IFR itself described the CDL as a “high-value economic credential,” yet the agency offered only cursory statements suggesting displaced drivers would simply move to “other sectors” with minimal disruption.

Taken together, these deficiencies persuaded the court that the challengers were likely to succeed, and it stayed the rule “in whole.”

FMCSA’s Return to Normal Rulemaking

Within a week of the stay, the FMCSA filed a motion asking the D.C. Circuit to pause the litigation indefinitely so FMCSA could return to the traditional rulemaking process by reviewing the roughly 8,000 comments that had been submitted in response to the IFR. The agency noted that the public comment period on the IFR would close on November 28 and that it intended to review those comments, consider potential changes, and issue a final rule after a full evaluation.

The message between the lines was clear: FMCSA no longer saw the IFR as defensible. The agency appears prepared to revise the rule substantially, if not abandon key components altogether, once it completes the normal rulemaking process.

Although the IFR never really had a chance to take off and is now formally stayed, its impact is already visible. Many state licensing agencies—acting quickly after FMCSA announced the IFR—slowed or completely halted issuance of non-domiciled CDLs. Some did so based on their reading of the IFR, others out of caution, and others because they lacked clarity about what FMCSA expected in the weeks between publication and judicial action.

The D.C. Circuit’s stay does not compel states to resume their prior practices. FMCSA has not yet issued specific follow-up guidance. And as a result, even though the IFR is frozen, the issue remains in limbo. This gap between federal legal reality and state administrative practice is likely to persist until FMCSA either issues explicit instructions or finalizes a new rule. In the meantime, non-domiciled CDL holders and applicants may encounter dramatically different outcomes depending solely on the states in which they are licensed or are seeking to be licensed. And carriers that employ these drivers are exposed in the meantime.

What Comes Next

FMCSA’s next steps will determine how long this period of uncertainty lasts. The agency has indicated it is preparing a final rule, and the comments it received—many of them critical—will likely shape the result. The agency will also need to consult with the states as the statute requires, and it will likely need to build a more defensible safety rationale if it intends to impose sweeping eligibility restrictions.

For carriers, the key takeaway is that the policy landscape remains fluid. The IFR is unlikely to return in its original form, but some form of revised eligibility standard may still emerge. For now, the status quo is more complicated than it appears. The federal rule is paused. The litigation is on hold. But the operational disruption triggered by the IFR continues to unfold in real time, especially in states that have not resumed processing non-domiciled CDL applications. Until FMCSA provides further guidance or publishes a new final rule, carriers and drivers will need to navigate a patchwork of state-level responses—and prepare for the likelihood that the agency’s second attempt will be more methodical, more data-driven, and more likely to withstand judicial scrutiny.