CALIFORNIA—On July 14, the United States Attorney’s Office for the Central District of California announced that S&K Towing Inc., based in San Clemente, had settled a lawsuit that alleged the company violated the Servicemembers’ Civil Relief Act by illegally selling at auction 150 vehicles owned by members of the United States military. The company agreed to pay $160,000 to those impacted.
In 2003, Congress enacted the Servicemembers’ Civil Relief Act, which protects officers, enlisted personnel, and their families by allowing them to pause financial obligations, including loans and court proceedings.
On March 25, 2026, the Department of Justice filed a lawsuit. According to prosecutors, between August 28 2020 and April 15, 2025, S&K Towing Inc. had a contract with Marine Corps Base Camp Pendleton, to tow stowed vehicles. The company violated Section 3958(a) of the SCRA by failing to obtain a court order before enforcing leins on vehicles and foreclosing on them. S&K Towing Inc also failed to verify the military status of the owners and had no company policies in place regarding the SCRA.
In May 2024, a Military Legal Assistance Officer contacted the company to explain that the actions were illegal, but the company continued to engage in them. Many of the vehicles were registered to people who lived on Camp Pendleton.
S&K Towing Inc. is in the process of closing and disposing of its remaining collection of vehicles. It agreed that should it reopen, it will comply with the Servicemembers’ Civil Relief Act, and as part of the settlement, it also agreed to deposit the 160,000 dollars into a settlement fund, which will take the form of an escrow account.
The lawsuit was brought by the Department of Justice’s Civil Enforcement Section, the Civil Rights Division, and the U.S. Attorney’s Office for the Central District of California.
