A Southern California towing company has reached a settlement with federal prosecutors, agreeing to pay approximately $160,000 to military personnel whose vehicles were allegedly auctioned or disposed of in violation of the Servicemembers Civil Relief Act (SCRA).
The lawsuit, filed by federal prosecutors, accused S&K Towing Inc., based in San Clemente, of illegally handling 148 vehicles belonging to active-duty service members stationed at Camp Pendleton over a five-year period beginning in August 2020. Some of these vehicles were allegedly towed while their owners were deployed overseas.
The settlement follows a federal lawsuit that cited evidence, including a phone call in spring 2024 where a Marine Corps legal assistance attorney reportedly warned the company that it could not sell a service member's car without a court order. The company owner allegedly responded, "We do this all the time."
In its court filings responding to the lawsuit, S&K Towing Inc. denied some allegations, asserting that its contract with Camp Pendleton did not reference the SCRA. The company stated it aimed to comply with state laws regarding lien enforcement when registered owners were properly notified and failed to retrieve their vehicles.
First Assistant U.S. Attorney Bill Essayli emphasized that service members have a legal right to protection while serving the nation, and the settlement compensates impacted individuals while serving as a warning to businesses regarding compliance with federal laws protecting the military. Assistant Attorney General Harmeet Dhillon of the Justice Department's Civil Rights Division added that the settlement sends a strong message that all towing companies must respect servicemembers' rights under the SCRA.
The settlement was reached three months after the lawsuit was filed. Prosecutors alleged that the company's contract with the Marine Corps Police Department at Camp Pendleton, which required compliance with federal and state laws, obligated the company to verify a vehicle owner's military status before enforcing a lien by selling or disposing of a towed vehicle, and to obtain a court order prior to such actions.
