S & K Towing Inc., a towing company based in San Clemente, California, held a contract with Marine Corps Base Camp Pendleton to provide towing services on the installation. The contract required S & K to comply with all applicable federal and state laws. One of those laws is the Servicemembers Civil Relief Act, which prohibits towing companies from selling or disposing of a vehicle owned by a protected servicemember without first obtaining a court order from a judge. The court order requirement exists because servicemembers are frequently absent from their vehicles and their home base for extended periods due to training and overseas deployments, and may not know their vehicle has been towed until long after any notice period has elapsed. Between August 28, 2020, and April 15, 2025, S & K Towing sold or disposed of approximately 148 vehicles owned by SCRA-protected servicemembers without obtaining a single court order. Some of those vehicles were registered to barracks addresses on Camp Pendleton itself. Some were auctioned after S & K was specifically told by the vehicle’s owner or a third party that the owner was active duty military. Some contained military equipment, uniforms, and service awards inside them when they were sold. On July 14, 2026, the Justice Department announced that S & K Towing has agreed to pay $160,000 to resolve the lawsuit filed against it in the U.S. District Court for the Central District of California on March 25, 2026.
The most damaging fact in the case is not the 148 vehicles or the five-year duration. It is what happened in May 2024. A Military Legal Assistance attorney at Camp Pendleton contacted S & K Towing by letter and by phone to explain that the company was violating the SCRA by selling servicemembers’ vehicles without court orders. The person who identified himself as a manager and owner of S & K Towing responded: “We do this all the time.” After that conversation, S & K Towing continued to sell and dispose of vehicles owned by SCRA-protected servicemembers without obtaining court orders. The company had no SCRA policies or training materials. It took no steps to verify whether vehicle owners were protected servicemembers before selling their property. It had, apparently, been doing this all the time.
The SCRA, a Court Order Requirement, and a Database the Company Never Used
The Servicemembers Civil Relief Act has governed the treatment of military members’ property since its modern form was enacted in 2003, updating protections that date back to World War I. Its towing provision is specific: a tow company that wants to sell or dispose of a servicemember’s vehicle must obtain a court order to do so, giving the servicemember an opportunity to be heard before their property is permanently taken. The federal government provides a free tool to help lienholders and towing companies comply: the Defense Manpower Data Center database, operated by the Department of Defense, which allows any business to check whether an individual is protected by the SCRA before taking action on their vehicle. S & K Towing made no use of this database. The Stars and Stripes report on the original lawsuit noted that SCRA compliance is an explicit requirement of towing contracts with military bases and that the DOJ has pursued multiple towing companies nationwide for the same category of violations.
The five-year violation window, August 2020 to April 2025, covers the entire duration of S & K’s contract operation under the Camp Pendleton agreement that required SCRA compliance. The company did not gradually become aware of its obligations and fail to adapt. It was told directly in May 2024 that it was breaking federal law, confirmed awareness of the law’s existence, and continued breaking it. The vehicles it sold included property of Marines and sailors stationed at one of the largest military installations in the United States, with some registered to rooms in the barracks on the base from which they were towed. A servicemember on deployment does not lose their vehicle to an auction because they forgot to pay their rent. They lose it because a towing company that held a federally regulated contract with their base chose not to spend the time verifying their status before selling their property at auction.
$160,000 to Servicemembers, a Shutting Down Company, and a Pattern Across the Towing Industry
The $160,000 settlement will be distributed to the servicemembers harmed by S & K’s conduct. While the company is in the process of shutting down its operations, it agreed as part of the settlement that if it engages in or reenters the towing business in any form, it will adopt written policies and procedures to comply with the SCRA before doing so. The settlement does not name the individual owners or managers of S & K Towing as defendants or impose personal monetary liability. First Assistant U.S. Attorney Bill Essayli stated: “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 DOJ’s Civil Rights Division has pursued a consistent line of SCRA towing enforcement actions over the past decade. Since 2011, the Department has obtained over $489 million in monetary relief for more than 152,000 servicemembers through its enforcement of the SCRA across all categories of violations including towing, mortgage servicer abuses, and repossessions. The CollisionWeek report on the original S & K lawsuit noted that this case is the latest in a string of similar federal enforcement actions against towing companies operating near military installations. S & K is not an outlier in the industry. It is the most recent company to discover that the DOJ’s Housing and Civil Enforcement Section tracks these violations.
Conclusion
S & K Towing held a contract with Camp Pendleton that required federal law compliance. It auctioned 148 vehicles belonging to the Marines and sailors on that base over five years without once obtaining the court order the law required. When a military lawyer called in May 2024 to explain what the law required, a manager told him they do this all the time. Then they did it again. The company is now shutting down. It will pay $160,000 to the servicemembers whose vehicles it sold. Some of those vehicles had military uniforms and service awards inside them. The manager who said “We do this all the time” has not been individually named in the settlement. The servicemembers who came home from deployment to find their vehicles gone are not named either.
