On April 15, 2022, the U.S. Department of Justice filed a lawsuit against Steve’s Towing, Inc., located in Virginia Beach, Virginia, pursuant to the Servicemembers Civil Relief Act (“SCRA”), 50 U.S.C. §§ 3901-4043, for alleged violations of the SCRA’s prohibition against enforcing a storage lien on a servicemember’s vehicle during, or within ninety days after, a period of military service without a court order. The lawsuit is the latest result of a coordinated effort between the DOJ’s Civil Rights Division and the U.S. Attorney’s Office for the Eastern District of Virginia.
Specifically, the DOJ claims that the company failed to obtain court orders prior to auctioning off vehicles belong to at least seven SCRA-protected servicemembers, including two vehicles belonging to a member of a Navy Seal team deployed overseas. The lawsuit further alleges that the company made no effort to contact the appropriate state department of motor vehicles for information prior to auctioning the vehicles.
The lawsuit seeks declarative and injunctive relief against the company, as well as monetary damages for the affected servicemembers pursuant to 50 U.S.C. § 4041(b)(2), and civil penalties pursuant to 50 U.S.C. § 4041(b)(3) (providing for civil penalties up to $55,000 for a first violation and up to $110,000 for any subsequent violations).
In its press release announcing the lawsuit, the DOJ made clear its intent to protect the rights of U.S. servicemembers. Said Assistant Attorney General Kristen Clark of the DOJ’s Civil Rights Division:
The flagrant disregard of a law designed to protect the rights of those in military service will not be tolerated. The Department of Justice is taking action to ensure that all servicemembers harmed by unscrupulous actions receive just compensation. We must put an end to unlawful business practices that bring harm and distress to those selflessly serving in our armed forces.
This lawsuit should serve as a stark reminder to the industry to ensure compliance with statutes and regulations protecting servicemembers or otherwise run the risk of swift retribution by the DOJ.