Pepe’s Towing Service has been at the center of several major lawsuits over the past two decades. The company won a $1.3 million federal settlement from the City of San Bernardino in 2020 over a rigged tow rotation, filed related suits against Rancho Cucamonga and San Bernardino again in 2020 and 2021, is currently defending a civil action by the City of Riverside alleging predatory towing targeting Latino residents, and paid into a $2 million wrongful death settlement in 2006 after one of its drivers killed a customer while high on methamphetamine.
San Bernardino Federal Lawsuit and $1.3 Million Settlement
On October 24, 2018, Pepe’s Towing filed a federal civil rights suit against the City of San Bernardino and 13 individual defendants in the U.S. District Court for the Central District of California. The case, Pepe’s, Inc. v. City of San Bernardino et al. (Case No. 5:18-cv-2277), alleged that officials had violated the company’s First Amendment and equal protection rights by running a rigged towing rotation for roughly 20 years.1City News Group. Pepe’s Towing Service vs City of San Bernardino
Owner Manny Acosta had applied for a spot on the city’s tow rotation in 1999, 2005, 2011, 2016, and 2018, and was rejected each time. The suit alleged the city renewed contracts with the same six towing companies (City, Hayes, Wilson, Big Z, Armada, and Tri-City) without competitive bidding.2San Bernardino County Sentinel. Suit Over SB Keeping Tow Company Off Rotation Two Decades Ends in $1.3M Settlement
A central allegation involved a 65,000-square-foot outdoor storage requirement the city adopted in 2011. Pepe’s argued the standard was designed to block new competitors, since incumbents were grandfathered in regardless of whether they met it, and that those incumbents kept their contracts despite missing, incomplete, or falsified inspection results. The complaint also accused city officials of a pay-to-play arrangement in which existing carriers contributed to the campaigns of elected officials, including the mayor, in exchange for no-bid contract renewals.3Larson LLP. City Agrees to Pepe’s Towing Settlement
On August 10, 2020, U.S. District Judge Stephen V. Wilson denied the city’s motion for partial summary judgment, calling it “inappropriate” in light of the strength of the First Amendment retaliation claim. With trial approaching, the city settled. Judge Wilson signed a stipulated judgment for $1.3 million on September 25, 2020. The payment structure was $700,000 upfront in October 2020, followed by three annual installments of $200,000 in July 2021, 2022, and 2023. Neither side admitted liability. Pepe’s was represented by Stephen G. Larson and R.C. Harlan of Larson LLP.2San Bernardino County Sentinel. Suit Over SB Keeping Tow Company Off Rotation Two Decades Ends in $1.3M Settlement3Larson LLP. City Agrees to Pepe’s Towing Settlement
Follow-On Lawsuits in Rancho Cucamonga and San Bernardino
On December 2, 2020, Pepe’s filed a federal lawsuit against the City of Rancho Cucamonga and the San Bernardino County Sheriff’s Department. The suit alleged the city illegally terminated Pepe’s towing agreement on July 22, 2020, in retaliation for management complaints, and asserted violations of Fourteenth Amendment equal protection, First Amendment free speech, and conspiracy claims. The complaint alleged that a Sheriff’s Department official, Executive Director John Fogerty, showed favoritism to competing tow companies through “backdoor deals.”4Daily Bulletin. Tow Company Sues Rancho Cucamonga for Voiding Contract
Back in San Bernardino, the truce did not hold. In April 2021 the city council committed to competitive bidding, and Pepe’s received a contract that took effect April 1, 2021. But on September 29, 2021, Pepe’s filed a second federal suit against the city, alleging the new process was still rigged and that certain carriers had won contracts despite compliance failures. Days later, on October 1, 2021, interim Police Chief David Green issued Pepe’s a notice of suspension from the rotation citing signage and environmental compliance issues, with the suspension set to begin October 18 for a minimum of three weeks and a final compliance deadline of March 31, 2022. Acosta called the suspension “a retaliatory act.”5San Bernardino Sun. San Bernardino Again at Odds With Pepe’s Towing
The Riverside Predatory Towing Lawsuit
On November 16, 2022, the City of Riverside sued Pepe’s in Riverside County Superior Court under the case name People of the State of California v. Pepe’s Inc. (Case No. CVRI2205025).6Trellis Law. People of the State of California vs Pepe’s Inc
The complaint alleges that between April 2019 and May 2021, Pepe’s towed 622 vehicles from the Lincoln Plaza shopping center at 2975 Van Buren Boulevard without the written authorization from the property owner, manager, or security company that California law requires. According to the city, neither Atlas Properties Real Estate Services (the manager) nor S&L Security (the security firm) authorized the tows.7Press-Enterprise. Riverside Accuses Towing Company of Predatory Practices Targeting Latinos
Riverside describes a systematic operation. It alleges Pepe’s hired “spotters” to identify vehicles to tow, then handed vehicle owners redacted authorization forms with the authorizing party, signature, address, and financial details blacked out. The city further alleges the company sought stacks of pre-signed blank authorization forms from the shopping center’s security company to make the tows appear legitimate.7Press-Enterprise. Riverside Accuses Towing Company of Predatory Practices Targeting Latinos
The city alleges that “the overwhelming majority of victims are Hispanic/Latino and/or lower socioeconomic status who would have had difficulty disputing the defendant’s authority to tow their vehicles.” Over the three-year period, Pepe’s allegedly collected $252,428.25 in impound fees: roughly $86,800 in 2019, $103,400 in 2020, and $62,100 in 2021. Vehicles left past the company’s deadlines faced escalating fees, and some were sold with Pepe’s keeping the proceeds.7Press-Enterprise. Riverside Accuses Towing Company of Predatory Practices Targeting Latinos
Riverside brought the claims under California’s Bane Act (Civil Code § 52.1), arguing that each illegal tow and forced fee payment involved coercion and threats in violation of civil rights. The city is seeking $25,000 in civil penalties per violation plus punitive damages and attorneys’ fees, for potential total penalties exceeding $15 million.7Press-Enterprise. Riverside Accuses Towing Company of Predatory Practices Targeting Latinos
Attorney Stephen G. Larson, representing Pepe’s, called the allegations “demonstrably false” and noted that the Riverside Police Department had previously investigated the claims and renewed its contract with the company. Riverside spokesperson Phil Pitchford acknowledged that the city continued to use Pepe’s services after filing the lawsuit, citing a “need for due process.”7Press-Enterprise. Riverside Accuses Towing Company of Predatory Practices Targeting Latinos
As of early 2025 the case remained open before Judge Harold W. Hopp. A case management conference was held on December 9, 2024 and continued, with a subsequent conference scheduled for March 10, 2025.8UniCourt. People of the State of California vs Pepe’s Inc
The 2005 Wrongful Death Case
The earliest major lawsuit involving Pepe’s arose from a fatal incident in Santa Ana. On June 12, 2005, tow truck driver Paul Michael Sassenberger attempted to tow Leoncio Flores’s Chevrolet Suburban from a homeowners association parking lot. Flores, a 42-year-old forklift operator, had parked illegally while carrying groceries inside. When he tried to stop the tow and offered to pay a $50 release fee, Sassenberger refused. Witnesses described Sassenberger playing “cat-and-mouse” with Flores in the lot. Flores was run over by both the tow truck and his own SUV after losing his grip on the vehicle.9Los Angeles Times. $2 Million Ends Suit Over Tow Truck Death
Sassenberger tested positive for methamphetamine after the incident. He pleaded guilty to felony vehicular manslaughter, use of methamphetamine, seven counts of illegally taking a vehicle, two counts of extortion, and one count of attempted extortion. On November 3, 2006, he was sentenced to six years in prison.10Orange County Register. Driver Gets Six Years for Tow Truck Death
The Flores family settled a wrongful death lawsuit for $2 million, paid by insurance for Pepe’s Towing and the Villa McFadden Homeowners Association. Flores’s widow received $1.3 million, his two teenage stepchildren received $125,000 each, and his three children living in Mexico received $135,000 each.9Los Angeles Times. $2 Million Ends Suit Over Tow Truck Death
About Pepe’s Towing
Pepe’s Towing Service, Inc. was founded in 1978 by Jose “Pepe” Acosta and his wife Delfina in Boyle Heights, Los Angeles, starting with a single Ford 350 pickup truck converted into a tow truck. Jose Acosta died in 1992, and the business passed to his sons, Jose Jr. and Manuel (Manny) Acosta, along with Lorenzo Navarro, who had joined the company in 1989.11Pepe’s Tow Service. History
The company now runs a fleet of more than 70 trucks across 11 locations in Los Angeles, Riverside, and San Bernardino counties, holds contracts with over 20 law enforcement agencies, serves as a central tower for the California Highway Patrol in several Los Angeles-area divisions, and operates on the California Department of Transportation’s Freeway Service Patrol.12San Bernardino Sun. San Bernardino to Pay $1.3 Million to Settle Federal Suit by Tow Company