DOJ S & K Towing settlement highlights SCRA court-order rule for vehicle liens

On July 14, 2026, the U.S. Department of Justice (DOJ) and S & K Towing, Inc. entered into a settlement agreement to resolve allegations that the company violated the Servicemembers Civil Relief Act (SCRA) when disposing of vehicles owned by SCRA-protected servicemembers without required court orders.

The dispute centers on a practical, consumer-facing issue: when a vehicle is towed or stored, lien enforcement and sale/auction steps can affect servicemembers’ property during military service (and shortly after). DOJ says the SCRA requires court review in those situations.

What DOJ alleged about S & K Towing

In its complaint, DOJ alleged that S & K Towing illegally sold, auctioned, or otherwise disposed of approximately 148 vehicles owned by servicemembers protected by the SCRA.

DOJ also alleges that from August 28, 2020, through at least April 15, 2025, S & K Towing towed “hundreds of vehicles” from Marine Corps Base-Camp Pendleton and, during that period, did not have SCRA policies or training materials and allegedly did not verify owners’ military status before selling or disposing of towed vehicles.

The SCRA rule DOJ is pointing to (plain English)

DOJ’s documents describe a key SCRA protection for towing and storage lien enforcement: a lien generally cannot be enforced against a servicemember’s property during military service (and within 90 days after) unless there is a valid court order.

DOJ’s complaint also notes the court-review requirement applies to lien categories including storage, repair, or cleaning and other covered lien reasons.

What the settlement requires

The settlement agreement resolves DOJ’s allegations and states that S & K Towing neither admits nor denies the United States’ allegations.

Under the agreement, S & K Towing must deposit $160,000 into an interest-bearing escrow account to compensate servicemembers the government determined may have been harmed.

Operationally, the agreement also restricts the company from foreclosing or enforcing liens—and from auctioning, selling, or otherwise disposing of covered vehicles—during military service and within 90 days thereafter unless a required court order is obtained. It further requires the company to submit SCRA policies and procedures and provide annual SCRA compliance training to covered employees involved in vehicle storage, sale, auction, or disposal.

What servicemembers and families should watch next

Even though this case involves a California-based tow company, the takeaway is national: SCRA protections can matter in everyday towing and storage lien disputes when the vehicle owner is on military service (or within the protected post-service window).

If a servicemember’s vehicle is towed or heading toward auction or sale, the practical question to ask is whether the enforcement process included the required SCRA court order for actions taken during the protected period.

DOJ also provides a Know Your Rights guide that includes the towing and storage court-order rule and the 90-day window.

Sources

• DOJ complaint: United States v. S & K Towing Inc.