California delayed cancellation of immigrant truckers' licenses. So feds will withhold $160 million

Ruben Vives, Los Angeles Times on Jan 7, 2026

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After California paused a plan to cancel the licenses of thousands of immigrant truckers, federal officials announced Wednesday they would withhold $160 million in transportation funds from the state.

The state was set to revoke 17,000 commercial driver's licenses for immigrants by Jan. 5 but instead extended the deadline amid the threat of a civil class action lawsuit by immigrant-rights groups.

Then the U.S. Department of Transportation took action, exacerbating the ongoing conflict between California and Washington.

"It's reckoning day for Gavin Newsom and California. Our demands were simple: follow the rules, revoke the unlawfully-issued licenses to dangerous foreign drivers, and fix the system so this never happens again," Transportation Secretary Sean Duffy said in a written statement. "Gavin Newsom has failed to do so — putting the needs of illegal immigrants over the safety of the American people."

Gov. Newsom's office referred a request for comment to state transportation officials.

The California Department of Motor Vehicles said in a written statement that it did not approve of Wednesday's action and that it had been compliant with state and federal regulations.

"We strongly disagree with the federal government's decision to withhold vital transportation funding from California — their action jeopardizes public safety because these funds are critical for maintaining and improving the roadways we all rely on every day," the statement read.

The $160 million in funding being withheld is in addition to the $40 million in funding that Duffy pulled from the state last year. He claims the state is not enforcing English proficiency requirements for truckers, but state officials say they have been in compliance.

The standoff between Newsom and Duffy began in June when Duffy carried out a nationwide audit into state programs that issued commercial driver's licenses to immigrants who were authorized to work in the country.

The audit was prompted by a fatal accident in Florida, where a Punjabi truck driver, who was living in the country illegally, killed three people.

The federal audit, conducted by the Federal Motor Carrier Safety Administration, which is tasked with improving the safety of commercial vehicles, found that California had wrongfully issued licenses with expiration dates that surpassed those on work visas and called for the revocation of 17,000 commercial driver's licenses.

The federal agency also tightened its rules, making it harder for some immigrant drivers to obtain the licenses.

The California Department of Motor Vehicles notified the drivers in the fall that they would lose their licenses in January. But last week, state officials said it would delay the cancellation of those licenses until March after the Sikh Coalition and the Asian Law Caucus filed a class-action lawsuit alleging that the DMV failed to offer proper recourse for affected drivers, refused to renew or issue new commercial driver's licenses, and violated their rights.

Bhupinder Kaur — director of operations at United Sikhs, a national human and civil rights organization — has told The Times that the cancellations disproportionately affect Sikh, Punjabi, Latino and other immigrant drivers who are essential to California's freight economy.

Last month, as he announced the lawsuit, Munmeeth Kaur, legal director of the Sikh Coalition, called on the state to fix its mistakes.

"If the court does not issue a stay, we will see a devastating wave of unemployment that harms individual families, as well as the destabilization of supply chains on which we all rely," he said. "These drivers have spent years anchoring their lives to these careers, only to now face potential economic ruin through no fault of their own—they deserve better, and California must do better."

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