On March 25, 2026, the Department of Justice filed a federal lawsuit against S&K Towing, Inc., a San Clemente, California towing company, for illegally selling or disposing of as many as 148 vehicles owned by servicemembers without obtaining the court orders required under the Servicemembers Civil Relief Act.
Many of the vehicles were towed from Marine Corps Base Camp Pendleton. Some were registered to barracks addresses on the base. Others contained military uniforms, equipment, and awards. S&K auctioned them anyway.
What Happened
Between August 2020 and April 2025, S&K Towing operated under a contract with Camp Pendleton that explicitly required compliance with all applicable federal and state laws. According to the DOJ’s complaint, S&K made no effort to comply with the SCRA.
Under 50 U.S.C. Section 3958, a person holding a lien on the property of a servicemember, including a storage or towing lien, may not sell or dispose of that property during the period of military service except by court order. The requirement exists because servicemembers are often deployed, in training, or stationed away from their vehicles and cannot respond to lien notices on normal civilian timelines.
S&K obtained no court orders. For nearly five years, the company sold vehicles belonging to protected servicemembers without checking military status and without seeking judicial authorization.
”We Do This All the Time”
In May 2024, a Military Legal Assistance attorney contacted S&K Towing and explained that the company was violating the SCRA. According to the DOJ’s complaint, a manager at S&K responded: “We do this all the time.”
After that exchange, S&K continued to sell and dispose of vehicles owned by SCRA-protected servicemembers without obtaining court orders.
That single quote captures the core compliance failure that leads to SCRA enforcement actions across every industry: the assumption that existing business practices are legally sufficient, combined with indifference when told otherwise.
The Pattern: Towing Companies Keep Getting Sued
S&K is not the first towing company the DOJ has sued for SCRA violations, and the pattern is consistent.
Goines Towing & Recovery (February 2024). Auctioned servicemember vehicles without filing proper military affidavits. Settlement: $66,805 to servicemembers plus $30,000 civil penalty.
Morningstar Properties, LLC (September 2024). Auctioned servicemembers’ property without obtaining required court orders. Settlement: $90,000 to servicemembers plus $40,000 in civil fines.
CarMax, Inc. (February 2026). Repossessed 28 servicemembers’ vehicles without court orders. Settlement: at least $420,000 to servicemembers plus a $79,380 civil penalty.
S&K Towing, Inc. (March 2026). 148 vehicles. Lawsuit pending.
The scale of the S&K case dwarfs the previous towing cases. Goines involved a handful of vehicles. CarMax involved 28. S&K allegedly sold 148 servicemembers’ vehicles over a five-year period, continued after being warned, and told a military attorney it was standard practice.
Why This Case Matters Beyond Towing
There is a common misconception that SCRA enforcement targets banks and property managers. The S&K case is a reminder that the SCRA protects servicemembers’ property rights broadly, and the DOJ will pursue violations wherever they find them.
Any business that can seize, sell, foreclose on, or dispose of a servicemember’s property is subject to the SCRA’s court-order requirement. That includes towing companies, storage facilities, auto lenders, mortgage servicers, landlords, and property managers.
As Assistant Attorney General Harmeet K. Dhillon stated: “Service members are often absent for extended periods due to training and deployments and may not know that their vehicle has been towed.”
First Assistant U.S. Attorney Bill Essayli put it more directly: “The men and women who serve in our nation’s military deserve peace of mind in knowing that their legal rights will be protected at home while they are away serving the United States.”
The Enforcement Math
Current SCRA civil penalties stand at $79,380 per violation for a first offense and $158,761 for subsequent violations (28 CFR Section 85.5, effective July 2025). With 148 vehicles at issue, S&K’s potential penalty exposure is substantial.
The DOJ is seeking monetary damages for affected servicemembers, restitution, civil penalties, and injunctive relief to prevent future violations. The case was filed in U.S. District Court for the Central District of California and is being handled by the DOJ Civil Rights Division’s Housing and Civil Enforcement Section.
This case also arrives weeks after the CarMax settlement and continues a pattern of accelerating enforcement. The DOJ has now brought 51 SCRA enforcement actions across two administrations, recovering over $484 million for servicemembers.
What This Means for Your Organization
The S&K case reinforces three compliance principles that apply across industries:
1. Check military status before taking adverse action. Whether you are towing a vehicle, filing an eviction, charging a fee, or repossessing collateral, the SCRA requires you to determine whether the individual is a protected servicemember. S&K’s failure was not a paperwork error. It was a complete absence of any military status verification process.
2. Ignorance of the law is not a defense, and neither is indifference. S&K was told it was violating the SCRA. It continued. The DOJ included the “we do this all the time” quote in its complaint for a reason: it demonstrates willful disregard, which strengthens the government’s case and increases potential penalties.
3. Enforcement reaches every industry. If your business can take an adverse action against a servicemember’s property, tenancy, or financial obligations, you need a compliance process. The DOJ has now sued towing companies, property managers, auto dealers, banks, credit unions, and mortgage servicers. No industry is exempt.
Servicemembers who believe their SCRA rights were violated in this case or any other should contact the Armed Forces Legal Assistance Program at legalassistance.law.af.mil.
civrel.io screens portfolios against the Department of Defense database, monitors for military status changes, and flags protected individuals before adverse actions occur. To see how many servicemembers are in your portfolio, request a free scan.
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