A California towing company kept auctioning off vehicles belonging to active-duty service members even after a federal attorney called and told them to stop, and the manager's response was blunt: "We do this all the time." Now S&K Towing Inc. is paying $160,000 to settle a Justice Department lawsuit over the scheme.
The San Clemente-based company settled a federal lawsuit filed in March alleging it sold or disposed of as many as 148 military-owned vehicles without court orders, many towed directly from Marine Corps Base Camp Pendleton. The case was brought by Assistant Attorney General Harmeet Dhillon's Civil Rights Division, which called it a long-running pattern of abuse targeting the men and women who serve this country.
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The Servicemembers Civil Relief Act (SCRA) requires towing companies to obtain a court order before selling or disposing of a vehicle owned by a protected servicemember; a protection designed for military members whose service may prevent them from defending their property rights in court. S&K's contract with Camp Pendleton explicitly required compliance with all applicable federal and state laws. The Justice Department alleged the company made no effort to follow any of it.
The DOJ's case makes clear this wasn't ignorance, it was indifference. According to a press release, in May 2024, a Military Legal Assistance attorney contacted S&K and explained directly that the company was violating federal law. The auctions continued anyway.
Dhillon was direct about what the settlement means for the industry, saying in a statement:
“For far too long, tow companies have sold or disposed of servicemembers’ vehicles in violation of federal law. This settlement sends a strong message that all towing companies must recognize servicemembers’ rights and take the necessary steps to comply with the SCRA.”
S&K denied the allegations, arguing its Camp Pendleton contract didn't specifically reference federal law and that it had hired a third-party to verify vehicle owners. That defense is difficult to square with the DOJ's account: the company allegedly kept auctioning cars even after being told, explicitly, by name, that the owners were on active duty.
First Assistant U.S. Attorney Bill Essayli said service members should not lose their property while carrying out their military duties.
“Members of the U.S. Armed Forces have a legal right to be protected while they serve our nation overseas. 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 scale of the problem extends well beyond S&K. Since 2011, DOJ enforcement of the SCRA has produced more than $489 million in relief for over 152,000 service members, a figure that underscores how widespread these violations have been.
S&K is now shutting down. If it ever returns to the towing business, it must first put SCRA-compliant policies in place. The $160,000 will go directly to the service members whose vehicles were taken.
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