First, even though Davis is a CA school, you will still have a much easier time getting a job in CA from Duke (you clearly have ties to CA). Obviously if you removed the husband from the picture, Duke is the only choice, but you can't do that so it is difficult.
Long distance takes an extremely hard toll on any relationship, especially a marriage (I don't know your life, but I assume "taking a break" is not really an option here. You have to seriously consider whether or not your marriage could withstand the year apart, especially since with 1L you aren't going to be able to travel that much. You also should consider the extra travel costs you will have to incur by taking Duke. Finally, is your husband's line of work something he could do in Raleigh/Durham? If you do decide on Duke, he should start looking for a new job as soon as possible, even if he has to stay at Davis for the rest of the year.
This is a really tough choice. The fact of the matter is that going to Davis is seriously going to limit your post-graduate career options compared to Duke, your husband is wrong when he says the employment options aren't that different. When you factor your marriage in, however, its not clear that the difference is totally worth it. This is kind of a lose-lose situation unfortunately, that's going to depend on which you want to risk more: getting a job after law school, or your marriage (I would probably risk getting a job after law school in your shoes, but YMMV).
the one silver lining is that there is a possibility of my husband working in Durham/NC research triangle (hes a scientist). but you're right, it is a lose-lose situation ... i am sure our marriage will survive it and we'll be fine but i anticipate it will be stressful. i think i will try to transfer back to a better school in CA if it looks like long distance will last beyond 1L but that's not something guaranteed of course.