The Justice Department announced today that S & K Towing Inc., a towing company based in San Clemente, California, has agreed to pay $160,000 to resolve a lawsuit alleging that it violated the Servicemembers Civil Relief Act (SCRA) by illegally auctioning motor vehicles owned by members of the military.
“For far too long, tow companies have sold or disposed of servicemembers’ vehicles in violation of federal law,” said Assistant Attorney General Harmeet K. Dhillon of the Justice Department’s Civil Rights Division. “This settlement sends a strong message that all towing companies must recognize servicemembers’ rights and take the necessary steps to comply with the SCRA.”
“Members of the U.S. Armed Forces have a legal right to be protected while they serve our nation overseas,” said First Assistant U.S. Attorney Bill Essayli for the Central District of California. “This settlement will provide compensation to impacted service members and serves as notice to all businesses to comply with federal laws that protect our military.”
The Department’s lawsuit, which was filed in the U.S. District Court for the Central District of California on March 25, alleges that S & K Towing illegally sold or disposed of as many as 148 vehicles owned by servicemembers, many of which it towed from Marine Corps Base Camp Pendleton. Even though S & K’s contract with Camp Pendleton required it to comply with all applicable federal and state laws, the company made no effort to comply with the SCRA, which requires tow companies to obtain a court order before selling or disposing of a vehicle owned by an SCRA-protected servicemember.
In May 2024, a Military Legal Assistance attorney contacted S & K Towing and explained that the company was violating the SCRA. In response, a manager at S & K Towing told the attorney, “We do this all the time.” After this exchange, S & K Towing continued to sell and dispose of vehicles owned by SCRA-protected servicemembers without obtaining court orders. Some of the vehicles S & K sold or disposed of were registered to addresses on Camp Pendleton. In other cases, S & K auctioned vehicles even after they were told that the owner was in the military.
Pursuant to the settlement agreement, S & K Towing will pay $160,000 to servicemembers who were harmed by the company’s conduct. While the company is in the process of shutting down its operations, it has agreed that if it engages in or reenters the business of towing or storing vehicles, it will adopt policies and procedures to comply with the SCRA.
Since 2011, the Department has obtained over $489 million in monetary relief for over 152,000 servicemembers through its enforcement of the SCRA. For more information about the Department’s SCRA enforcement efforts, please visit www.servicemembers.gov.
Servicemembers and their dependents who believe that their rights under the SCRA may have been violated should contact the nearest Armed Forces Legal Assistance Program Office. Office locations can be found at legalassistance.law.af.mil
