Home Nonmilitary action More SCRA enforcement activities by the Department of Justice | Hudson Cook, LLP

More SCRA enforcement activities by the Department of Justice | Hudson Cook, LLP


The US Department of Justice’s Servicemembers and Veterans Initiative continues. In late July, the DOJ issued a consent order in a case in Texas where a towing company sold active-duty military cars without a court order.

In previous cases, the DOJ has claimed that towing companies salvaged cars from active-duty military personnel and sold them without the court order required by SCRA and that a storage company sold military assets. while their owners were deployed overseas, also without a court order. . Companies have paid penalties and indemnities to affected military personnel.

In its most recent case, the DOJ settled allegations that United Tows, LLC, engaged in a pattern or practice of SCRA violation when, without a court order, it auctioned, sold or otherwise alienate the motor vehicles and personal effects of SCRA. – military personnel protected during a period of military service or within 90 days thereafter. The DOJ report says a serviceman contacted United Tows after learning his car had been sold while he was in basic training (which constitutes active duty), but the person he spoke with said that she didn’t believe he was a soldier. Without investigating his claim, United Tows sold his car and some personal effects that were in the car. According to the consent order, United Tows did not have SCRA procedures in place to avoid the sale of cars that had belonged to active duty military personnel.

The Consent Order refers to certain new policies developed and adopted by United Tows when negotiating the Consent Order, designed to avoid SCRA violations like those alleged. Beyond regular SCRA cleanings, United Tows has agreed to take certain actions to identify whether a car owner is a service member before exercising a lien on the car:

(1) review any information it has received from the owner (s) or a third party for evidence of military service (for example, statements about military service, APO / FPO addresses, or addresses on a military installation);

(2) visually examine the vehicle and its contents for evidence of military service (eg, military documents, uniform, equipment, license plate or badges); and

(3) search the Defense Manpower Data Center website for proof of SCRA eligibility by last name and social security number. In the event that United Tows does not have an SSN for an owner, it is United Tows policy to attempt to determine if the owner is a member of the SCRA Protected Service by searching the DMDC website by name and date of. birth (and if United Tows is aware of any aliases or surname variations, such as a maiden name or a hyphenated surname, United Tows policy says they will search on the DMDC website each variant name). In cases where neither an owner’s SSN nor date of birth is readily available, it is United Tows policy to use the owner’s name and address to search an owner’s database. commercially available public records to obtain the owner’s SSN or, if an SSN cannot be found, the owner’s date of birth.

United Tows policy requires them to obtain a court order or SCRA compliant waiver from a service member before prosecuting a car or its contents. It also requires United Tows, as a final step in the SCRA diligence, to file a non-military affidavit which it prepares no later than two days before filing a request for a default judgment in all cases where it files a complaint. to assert a privilege.

These specific procedural steps, while not explicitly required by the SCRA and clearly not required in Texas, can be useful additions to a SCRA policy and procedure designed to avoid harming active-duty military personnel. It is not clear whether the GM obligatory these specific steps in the negotiation of the consent order, but they have clearly passed the DOJ’s control and appear well suited to protect active-duty military personnel.

The consent order also included damages of $ 20,000 payable to the service member mentioned above and $ 20,000 to be divided among four other service members identified in the investigation, as well as a civil fine of 10 $ 000.

The DOJ clearly lives up to its commitment to the application of the SCRA. While five or more years ago, its SCRA enforcement actions focused on compliance by finance companies with reductions in financial charges and actions to seize personal property against military personnel as part of More recent consumer credit transactions reflect a focus on the actions of a wider range of vendors whose business models affect service members. We will continue to monitor and report these cases. Towing companies and others that enforce privileges on personal property that may belong to active duty military personnel would do well to take the time to update their SCRA compliance policies to ensure they include measures designed to identify military owners.