The New York attorney general, Letitia James, on Friday sued to block the Trump administration’s cancellation of more than $73 million in highway funding for the state.
The lawsuit, which Ms. James filed in the U.S. Court of Appeals for the Second Circuit, asks the court to overturn the U.S. Department of Transportation’s decision and to restore the funding.
The Department of Transportation said last week that it would withhold financial support because New York refused to revoke commercial driver’s licenses it said were issued illegally. Ms. James said the trucking licenses were in compliance with state and federal regulations and only issued to people with legal status.
“New Yorkers depend on safe, reliable roads and bridges to get to work, take their kids to school and keep our economy moving,” Ms. James said. “The administration cannot promise funding to our state and then abruptly yank it away.”
Last week, the Transportation Department said it would also withhold an additional $147 million in future funding. The federal aid funds road maintenance, safety improvements and infrastructure. The attorney general said the aid block could interfere with “critical” transportation projects, increase costs and effect local economies across the state.
The trucking licenses have been part of a protracted battle between New York and the department for months. Sean P. Duffy, the U.S. transportation secretary, said in June 2025 that the federal government would audit state licensing practices because millions of people entered the United States illegally, leaving the truck licensing system vulnerable to exploitation. The Federal Motor Carrier Safety Administration audit released in December found that 107 of New York’s commercial driver’s licenses were issued illegally out of 200 sampled records. The agency said the state issued commercial licenses to foreign drivers without providing evidence that it had verified the driver’s legal status.
“When more than half of the licenses reviewed were issued illegally, it isn’t just a mistake — it is a dereliction of duty by state leadership,” Mr. Duffy said in a statement. “Gov. Hochul must immediately revoke these illegally issued licenses.”
Gov. Kathy Hochul said in a statement on Friday that the department’s claims were false and that the blocking of federal funds was “political payback.”
“New York has always followed federal rules when issuing CDLs, something even the previous Trump Administration verified year after year,” Ms. Hochul said.
The attorney general’s office said the state reviewed the individual cases the department identified and found that all the drivers had legal status. The office said the agency’s findings may have relied on “outdated or incorrect information.”
According to Ms. James, the agency has continued to pressure New York to revoke certain lawfully-issued Commercial Driver’s Licenses held by immigrants. She argued that revoking the licenses would disrupt crucial industries that rely on commercial drivers and could exacerbate the bus driver shortage.
Samantha Latson is a Times reporter covering New York City and a member of the 2025-26 Times Fellowship class, a program for journalists early in their careers.
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