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Santa Ana City Council November 18, 2024 Page 12 6. The adoption of the Amended Ordinance would illegally infringe the right to contract. The Ordinance also violates hosts' right to contract under the California constitution, which prohibits laws impairing the obligation of contracts. (Cal. Const., Art I, § 9.) The "threshold question" is "whether the state law has, in fact, operated as a substantial impairment of a contractual relationship." (Alameda Cnty. Sheriff's Ass 'n v. Alameda Cnty. Emps. ' Ret. Ass 'n, 9 Cal. 5th 1032, 1075 (2020).) "If the state law is found to create a `substantial' impairment, the inquiry turns to the means and ends of the legislation," with the state required to demonstrate a "significant and legitimate public purpose" for the law and the court required to evaluate whether the adjustment of the rights and responsibilities of the contracting parties is "reasonable" and "appropriate to th[at] public purpose." (Id. (citations omitted); see also Calfarm Ins. Co. v. Deukmejian, 48 Cal. 3d 805, 831 (1989).) Rental Alliance hosts have already agreed to rent their property on a short-term basis to guests in upcoming months. An immediate ban on STRs would invalidate those contractual obligations of STR owners in violation of this constitutional right. 7. The adoption of the Amended Ordinance would deprive hosts of their substantive due process rights. Termination of a lawful nonconforming use effects a deprivation of property without due process of law, and banning the ability of homeowners to rent their home to visitors more broadly violates their substantive due process rights under the California and U.S. constitutions by infringing on their property rights, including the "right to lease," one of the many property rights within the "bundle of sticks" of property rights. (United States v. Craft, 535 U.S. 274, 278 (2002).) 8. The proposed fines violate the United States Constitution. The administrative fines proposed by the Resolution are also so excessive as to raise federal constitutional concerns. The Eighth Amendment to the United States Constitution forbids the City from imposing excessive fines. The United States Supreme Court has held that "[t]he touchstone of the constitutional inquiry under the Excessive Fines Clause is the principle of proportionality: the amount of the forfeiture must bear some relationship to the gravity of the offense that it is designed to punish." (United States v. Bajakajian, 524 U.S. 321, 334 (1998).) Here the Amended Ordinance's proposed fines of $1,500 for a first violation, $3,000 for a second violation, and $5,000 for a third violation fail to meet the principle of proportionality. (See, e.g., Kalthoff v. Douglas Cnty., 2021 WL 3010006, at * 6 (D. Nev. July 15, 2021) (finding "it troubling that many of these fines [for violations of short-term rental ordinance] [we]re for several thousands of dollars without any authority to lower the fines for particular violators' circumstances" and enjoining enforcement of fines on constitutional grounds).) 12