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Paul L. Caron
Dean
Pepperdine Caruso
School of Law

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  • UC Berkeley Artificial Intelligence Policy

    Last last week, just before the Memorial Day weekend, news broke that the faculty of the UC Berkeley School of Law have adopted an “Artificial Intelligence Policy” applicable to Berkeley Law students – but not to the faculty itself.

    The policy itself is here. In a nutshell, the policy established a “students may not use AI in connection with work submitted for credit” default, with individual faculty members permitted to set different rules regarding AI use.

    Reaction across social media has been swift – and mixed, including comments and conversations through X, BlueSky, LinkedIn, Reddit, and Substack. I have seen contributions from law faculty, lawyers and legaltech professionals, and current law students. I have not seen any public comments from Berkeley Law students. Just about everyone seems to agree that enforcing the policy will be difficult if not impossible.

    A perhaps representative sympathetic view comes from Above the Law, under the headline “UC Berkeley Cracks Down On AI Use With New Policy: Pedagogy ain’t dead yet!

    A far less charitable view appears via Seth Chandler’s newsletter (TaxProf Blog readers will note my frequent references to Seth, at Houston Law), under the headline “Law schools should not adopt Berkeley’s awful new anti-AI policy.

  • Boll, Saez, and Zucman on California Billionaires

    Jasper Boll (Paris School of Economics), Emmanuel Saez (Berkeley), and Gabriel Zucman (PSE and Berkeley) have a new NBER working paper, “California Billionaires: Wealth, Taxes, and Wealth Tax Revenue Estimates.” Here is the abstract:

    This paper documents the wealth of California’s billionaires and the taxes they pay. California billionaires’ wealth exceeds $2 trillion today, the equivalent of 50% of California’s GDP. It has grown 144% from 2023 to 2025, fueled by the AI boom. Over the longer run, the real wealth of California’s billionaire class—the 0.0002% richest households—has been multiplied by 30 from 1982 to 2025, while average real family income in California has about doubled. California billionaires pay about 0.2% of their wealth in California income tax ($3.2 billion/year), representing 2.4% of total California income tax revenue on average over 2023-2025. Using Securities and Exchange Commission data from Alphabet, Meta, Oracle, and Nvidia since 2004, we estimate the trajectory of wealth, income, and taxes paid by the top 4 California billionaires—Page, Brin, Zuckerberg, Ellison (through 2020), and Huang (since 2021)—focusing on their business wealth. This group alone holds nearly $1 trillion in business wealth, almost half of total California billionaire wealth. For this group, wealth growth (+322% over 2023-2025) and low taxation (0.04% of wealth in annual California income tax) are more pronounced. The proposed one-off California billionaire tax of 5%, payable over 5 years, is both small relative to California billionaires’ wealth gains and large relative to the taxes they currently pay. We estimate that it could raise about $100 billion, with comparatively minor impacts on income tax revenue. Using empirical estimates of mobility responses to wealth taxation, we find that an annual wealth tax on California billionaires could raise substantial additional revenue even after accounting for income tax losses due to mobility.

  • Avi-Yonah on the Revival of Economic Substance

    Reuven Avi-Yonah (Michigan), “Liberty Global and the Revival of Economic Substance” (Tax Notes, May 25, 2026):

    On April 21 the Tenth Circuit issued its long-awaited opinion in Liberty Global. By a 2-1 majority, the panel upheld the decision of the district court that a tax shelter used by Liberty Global had to be disregarded under the economic substance doctrine (ESD).

    This decision is the third victory of the government in ESD cases, following Patel and Otay. But it is the most significant because it strikes a decisive blow against tax shelters built on a literal application of the statutory text but ignore Congress’s purpose in enacting that text. Patel established that the ESD can be relevant to tax shelter cases even if the shelters follow the text of the statute, and Otay held that a transaction that had a valid overall business purpose can still fail the ESD if that purpose did not require an elaborate tax-motivated structure. Liberty Global goes beyond these cases by holding that a tax shelter that complies with the text of the code can be disregarded because it deviates from Congress’s purpose in enacting that text. This is a welcome departure from the narrow textualism followed by the Tax Court in Varian.

    To understand the significance of these cases, it is helpful to review the history of the ESD. It stems from Frank Lyon, a Supreme Court case decided in 1978. Before Frank Lyon, the leading cases on disregarding tax-motivated transactions, Gregory and Knetsch, focused on whether the transaction was consistent with Congress’s purpose in enacting the statutory provision.

  • Bloomberg: “Democrats’ 100% Tax Plan on Fund Payouts Zeroes In on GOP Angst”

    Chris Cioffi (Bloomberg Law): Democrats’ 100% Tax Plan on Fund Payouts Zeroes In on GOP Angst

    Democrats are trying to force the GOP’s hand by introducing a 100% tax on payments from the Justice Department’s new fund for victims of government weaponization, even as Republicans face increasing pressure on what’s become a politically toxic $1.8 billion pot of money.

    Rep. Mike Thompson (D-Calif.) unveiled his version of the propsoal Wednesday and Republicans thwarted his attempt to force a vote on other legislation targeting the fund Thursday at a Ways and Means Committee markup.

    (more…)
  • Crypto Asset Tax Legislation Progressing

    Katie Lobosco (Tax Analysts): Bipartisan Crypto Tax Bill Introduced After Months of Discussion

    A bipartisan duo of House taxwriters introduced a bill that would address the way digital assets are taxed in an attempt to make it easier for consumers and investors to use digital payment technology.

    House Ways and Means Committee members Max L. Miller, R-Ohio, and Steven Horsford, D-Nev., unveiled the Digital Asset Protection, Accountability, Regulation, Innovation, Taxation, and Yields (PARITY) Act on May 19, less than a week after taxwriters met in a closed-door roundtable on the subject.

    (more…)
  • Costco Fights Tariff Refund Class Action Suit

    Natalie Olivo (Bloomberg Law): Costco Calls Suit Over Tariff Refunds Premature

    Costco urged an Illinois federal court to toss a putative consumer class action seeking to recoup the higher costs that shoppers paid under President Donald Trump’s global tariffs, contending that the case is premature in the wake of uncertain corporate refunds. 

    (more…)
  • Searching for God in Silicon Valley

    The Free Press: Searching for God in Silicon Valley, by Avital Balwit (Chief of Staff to Dario Amodei, CEO of Anthropic):

    The work of building frontier AI has brought us to the edge of where He might be.

    A running joke at Bay Area parties is that AI researchers are “building God.” This, of course, sounds wildly grandiose. No one I have met means it literally—nobody thinks they are making something supernatural or divine. …

    From outside San Francisco, the joke is sometimes heard as a reflection of spiritual lacking—that the pursuit of AGI (artificial general intelligence) is a stand-in for a God-shaped hole, that clever technologists who reasoned their way out of the old faith are now building an idol to fill the vacancy. I do not think that is quite what is happening. People need meaning, and intense, world-shaping work is one of the oldest ways to find it; that part is not new and often not sinister. What is different here is that this particular work sits so close to the old questions—what are we, where did this come from, what comes after—that you cannot do it long without staring into them. They are not building God because they miss Him. They are building something that has brought them, unexpectedly, to the edge of where He would be. …

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  • Finding Meaning in Suffering

    Dispatch Faith: The World Needs to Recover True Lament. Christianity Can Teach It., by Kelly M. Kapic (Covenant College), M. Elizabeth Lewis Hall (Biola University) & Jason McMartin (Biola University) (Co-Authors, When the Journey Hurts: Finding Meaning in Suffering for Heart, Mind, and Soul (2026)):

    Benjamin Franklin famously declared that only death and taxes are certain. But he forgot one thing: Suffering is the third universal—as inescapable as mortality, as indifferent as the IRS.

    Every major religion or philosophical system in human history has addressed the problem of suffering. Buddhism teaches acceptance and detachment—the goal is to loosen the grip of craving and desire that amplify pain, ultimately freeing the self from suffering’s hold. Secular modernity largely hands suffering to experts: therapists, physicians, pharmaceuticals, and self-optimization regimens. Suffering becomes a problem to be solved, a malfunction to be corrected. Stoicism, of the ancient and current life hack varieties, encourages cultivating indifference and yielding to fate. 

    But Judaism and Christianity, at their best and growing out of their shared biblical tradition, offer something none of these does: a structured, communal practice for bringing honest anguish into relationship with a God who, the psalms insist, neither despises nor ignores the cry of the afflicted.

    That practice is called lament. In the psalms, lament is a structured form of prayer that follows a discernible pattern: crying out to God, complaining, requesting, remembering God’s works, and—perhaps most surprisingly—often ending in praise of God. And for much of contemporary American Christianity, which we know best and have been studying for years, it has quietly disappeared. But research we’ve been conducting suggests the costs are both deeper and wider than most churches recognize.

    The current season of Lent is a time for honest reckoning—40 days of sitting with mortality, limitation, and the long ache of a world not yet whole. It is, at least in theory, the one time of year when Christianity makes room for suffering rather than rushing past it. And yet for many people, Lent passes without ever touching what is actually hardest in their lives. 

    That gap between what the church’s calendar invites and what its culture permits is where our research—compiled for our forthcoming book, When the Journey Hurts—begins.

    When one of our research participants was asked what lament had done for her, she said something we’ve heard in different forms from many people we’ve interviewed: “I never gave myself permission to be honest with God. I think for a long time I really felt like I needed to put up a face for him because I wanted to give him what he wanted. But I had a wrong idea of what he wanted. He wants honesty from us.” …

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  • Congratulations, Pepperdine Caruso Law Class of 2026

    We honored the Pepperdine Caruso Law Class of 2026 last week with several celebrations, including:

    Wednesday Morning: 3L Breakfast

    Wednesday Evening: Baccalaureate Service

    I had the honor of inscribing all of the Pepperdine Caruso Law branded Bibles we gave to the graduates with their names and the five verses I used in my message on Embracing God’s Plan for Your Life (Jer. 29:11, Ex. 4:10-12, 2 Cor. 12:9-10, Mic. 6:8, & Ps. 139:13-14).

    Thursday Morning: Commencement

    The highlights of graduation were the remarks by G. Marcus Cole, Joseph A. Matson Dean of Notre Dame Law School, recipient of Pepperdine University’s pre-eminent distinction, the Honorary Doctor of Laws Degree

    Read more
  • Law School Rankings: Bar Passage

    Following up on my previous posts:

    This post ranks law schools based on the combined First-Time Bar Passage and Ultimate Bar Passage for the most recent data, using the weighting in the current U.S. News methodology: First-Time Bar Passage Rate (Class of 2025): 18%, and Ultimate Bar Passage Rate (Class of 2023): 7%:

    SchoolFirst-Time Bar Passage Rank
    18%
    2-Year Ultimate Bar Passage Rank
    7%
    Overall Bar Passage Rank
    Stanford111
    Belmont2132
    SMU3403
    Yale514
    Duke4115
    Harvard6206
    Chicago967
    Texas8148
    BYU1119
    Alabama101110
    UCLA75111
    Texas A&M13812
    Texas Tech123613
    NYU162214
    Vanderbilt172115
    Boston College181816
    Ohio State155717
    Virginia25118
    Michigan22919
    UC-Berkeley204320
    USC281521
    Pittsburgh195022
    North Carolina233323
    Kansas311624
    Illinois273125
    Boston University244826
    Baylor302927
    Penn321828
    Minnesota265529
    Utah341730
    Arizona State217731
    Washington & Lee332632
    Campbell294933
    Oklahoma372534
    Columbia401035
    Georgetown366936
    William & Mary393537
    UC-Davis359038
    Florida386539
    Cornell432340
    Univ. of Wash.414641
    Northwestern452742
    Wisconsin52143
    Florida State448344
    Iowa4211445
    Richmond476546
    Villanova494547
    Regent4610648
    Pepperdine534749
    Seton Hall489450
    Read more

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