A Federal lawsuit has revealed that S & K Towing, Inc., a California-based towing company, illegally sold and disposed of as many as 148 servicemembers’ vehicles without obtaining court orders, violating the Servicemembers Civil Relief Act (SCRA). The towing company, operating from San Clemente, repeatedly auctioned off vehicles belonging to active-duty military members between August 28, 2020, and April 15, 2025, often towing them from Marine Corps Base Camp Pendleton and other locations where servicemembers were stationed. The violations underscore a critical protection gap: while SCRA explicitly requires tow companies to obtain court orders before selling or disposing of military-owned vehicles, S & K Towing proceeded with illegal auctions anyway. The company knew about its obligations—in May 2024, after a Military Legal Assistance attorney explained the SCRA requirement, a company manager responded, “We do this all the time,” then continued violating the law for months afterward.
Table of Contents
- How Did a Towing Company Illegally Seize and Auction Off Servicemembers’ Vehicles?
- The Government’s Legal Case and SCRA Violations
- Why May 2024 Became the Turning Point in Federal Enforcement
- What Remedy Did Affected Servicemembers Receive?
- Warning Signs That Towing Companies May Be Violating SCRA
- S & K Towing’s Shutdown and Compliance Condition
- What This Case Reveals About Enforcement Gaps in Military Consumer Protection
How Did a Towing Company Illegally Seize and Auction Off Servicemembers’ Vehicles?
S & K Towing operated a systematic pattern of illegally selling vehicles owned by SCRA-protected servicemembers. Many of the vehicles were towed from Camp Pendleton, or belonged to military members who had registered those vehicles at their barracks addresses on the base. Over nearly five years, the company disposed of approximately 148 vehicles without following the legal requirement to seek court authorization before sale.
The Servicemembers Civil Relief Act provides crucial protections for active-duty military members facing financial hardship or temporary duty complications. SCRA explicitly requires that creditors and tow companies obtain court orders before repossessing or selling property belonging to servicemembers. This protection exists because military deployment, service-related relocations, and active-duty commitments can prevent servicemembers from physically appearing in court to defend their property rights. By ignoring this requirement, S & K Towing stripped military members of their vehicles and assets without any judicial oversight or due process.
The Government’s Legal Case and SCRA Violations
The Department of Justice sued S & K Towing based on clear evidence that the company knowingly violated the Servicemembers Civil Relief Act over an extended period. From August 2020 through April 2025, the company systematically failed to obtain court orders—a non-negotiable requirement under federal law—before auctioning off servicemembers’ vehicles. This was not a technical oversight or isolated incident; it was a routine business practice.
A critical moment occurred in May 2024 when a Military Legal Assistance attorney contacted S & K Towing to explain its SCRA obligations. Rather than acknowledge wrongdoing or commit to compliance, a company manager responded, “We do this all the time.” That statement is damning: it reveals the company understood the legal requirement yet had normalized violating it. Most troubling is what happened next—despite this explicit warning, S & K Towing continued conducting illegal vehicle auctions for several more months. The company’s callous indifference to servicemembers’ legal protections demonstrates the stakes for active-duty military members who lacked the resources or proximity to fight back against illegal seizures.
Why May 2024 Became the Turning Point in Federal Enforcement
The May 2024 warning from Military Legal Assistance marked a critical juncture. Before that contact, S & K Towing could claim ignorance or confusion about SCRA requirements, though such claims would have been weak given that the company operated in proximity to Camp Pendleton, where trained legal advisors routinely counsel military members. after May 2024, any further violations constituted knowing, willful disregard of federal law—and that is precisely what the company delivered. This timeline is important for understanding enforcement gaps.
Military Legal Assistance attorneys work within the Defense Department to help servicemembers understand their rights and file complaints when violations occur. However, their capacity to investigate towing company practices is limited; they cannot unilaterally inspect business records, subpoena tow company files, or monitor ongoing illegal sales. Once the attorney alerted S & K Towing, the burden shifted to the Justice Department to gather evidence, build a case, and pursue litigation. The months between May 2024 and the eventual settlement showed how slowly federal enforcement can move, even when the violation is blatant and ongoing.
What Remedy Did Affected Servicemembers Receive?
S & K Towing agreed to a settlement of $160,000 to be distributed among the affected servicemembers whose vehicles were illegally seized and sold. The Justice Department negotiated this settlement after establishing that the company had violated SCRA protections repeatedly over nearly five years. While the settlement provides some financial relief to military members who lost vehicles, it falls short of full restitution for many victims.
The $160,000 settlement divided among approximately 148 servicemembers translates to roughly $1,080 per victim on average—a sum that does not account for the actual value of vehicles lost, the downstream costs of being without transportation, the damage to credit or financial records, or the time and stress involved in reporting and pursuing relief. A servicemember stationed at Camp Pendleton who relied on a vehicle for commuting, family transportation, or off-duty travel faced genuine hardship when S & K Towing auctioned it off without court authorization. The settlement acknowledges the violation but leaves many servicemembers significantly short of full recovery.
Warning Signs That Towing Companies May Be Violating SCRA
Servicemembers and their families should watch for red flags indicating illegal tow-and-sell practices. If your vehicle is towed, immediately verify whether the towing company has obtained a court order before any sale takes place. Ask the company in writing to provide documentation of court authorization; if they cannot produce it within a reasonable timeframe, that is a major warning sign. Many tow companies will claim that the storage lot or auction house handling the sale “takes care of that,” but under SCRA, responsibility lies with the tow company to ensure compliance before handing off the vehicle.
Another warning sign is high-pressure communication claiming imminent sale dates without allowing time for you to verify court authorization or hire legal representation. Tow companies that rush servicemembers toward a sale—particularly when the servicemember is deployed or stationed far from the storage facility—are often aware that a legitimate court order cannot be produced. If you receive a tow notice while on active duty or immediately after deployment, contact your installation’s Military Legal Assistance office. They can send formal notice to the tow company of your SCRA status and demand compliance with the law.
S & K Towing’s Shutdown and Compliance Condition
Following the settlement, S & K Towing agreed to cease towing and vehicle storage operations. The company is shutting down rather than face additional litigation or public scrutiny. However, the settlement includes a compliance clause: if S & K Towing ever re-enters the towing, storage, or vehicle disposition business in the future, it must comply with the Servicemembers Civil Relief Act.
This condition is meant to prevent the company from simply rebranding or reorganizing to evade consequences. The shutdown itself represents a form of justice, though it comes too late for the 148 servicemembers already harmed. Competitors in the towing industry may take note, recognizing that willfully violating SCRA protections can result in federal lawsuits and forced business closure. The question remaining is whether this case will deter other tow companies from repeating S & K Towing’s practices, or whether the industry requires more aggressive enforcement.
What This Case Reveals About Enforcement Gaps in Military Consumer Protection
The S & K Towing case exposes a structural problem: servicemembers have strong legal protections on paper, but enforcement depends on whether violations are reported, investigated, and prosecuted. Many military members may not know about SCRA protections or may hesitate to file complaints with federal authorities, fearing retaliation or additional complications to their military careers. Tow companies operating near military installations understand this vulnerability and exploit it.
The fact that a company manager casually told a Military Legal Assistance attorney, “We do this all the time,” before continuing to violate SCRA suggests that some tow companies view the risk of enforcement as low enough to be acceptable. Until the Justice Department prosecutes more cases, imposes larger penalties, and publicizes enforcement actions, some tow companies will calculate that the cost of occasional settlements is worth the profit from illegally auctioning military vehicles. For servicemembers, the lesson is clear: know your SCRA rights, document everything, report violations immediately to both Military Legal Assistance and the Justice Department, and never assume a tow company is acting lawfully just because it is operating openly in your community.
- —