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When 1940s Los Angeles detective Max Hoover () is called to investigate the death of a local woman who turns out to be his paramour Alison Pond (Jennifer Connelly), he and his elite group of Los Angeles Police Department detectives—Ellery Coolidge (Chazz Palminteri), Eddie Hall (Michael Madsen), and Arthur Relyea (Chris Penn)—find themselves up against the FBI and the Atomic Energy Commission, both of which are trying to keep the investigation under wraps.

Mulholland Falls is based on a story and screenplay written by American screenwriters Peter Dexter and Floyd Mutrux. It is loosely based on the Los Angeles Police Department's legendary "hat squad" of the 1960s, an elite team of four detectives in the Robbery-Homicide Division who were known for their hats, their expensive tailored suits, and their ability to fill hundreds of jail cells with those who had run afoul of the law.

It's called a "slapjack" or, alternatively, a "sap". It consists of two pieces of heavy leather with a mass of lead on the business end. Used for personal defense in close quarters, a slapjack can prove to be lethal and are illegal in most states.

It isn't, other than the fact that they both reference Los Angeles' Mulholland Drive, a 21-mile-long scenic road in the eastern Santa Monica Mountains of Southern California. In the movie, Mulholland Falls is a cliff along the drive where Hoover and his partners throw off criminals they don't want in L.A..

When Max realizes that Colonel Fitzgerald (Treat Williams) is going to throw him and Ellery out of the plane in mid-air, just as he did to Allison because she was "in the way", he and Ellery rush the Colonel. Shots are fired, but Max and Ellery succeed in tossing Fitzgerald and his aide from the plane. Suddenly, the plane begins to swoop and dive, and they realize that one of those shots must have struck the pilot. Max manages to prop up the dying pilot long enough to land the plane, after which he and Ellery emerge, laughing at their narrow escape. Ellery begins to feel a cold and sit on the ground to rest, then realizes that he's been shot in the abdomen. He dies in Max's arms. Later, following Ellery's military funeral, the three remaining squad remembers top Ellery's coffin with their hats, indicating that the squad has been disbanded. Kate (Melanie Griffith) asks Max what he's going to do now, but Max is uncertain. He makes gestures towards a possible reconciliation, but Kate covers his mouth with her black-gloved hand and reminds him that he broke her heart. In the final scene, Kate walks away, winding her way between the various gravestones.

For the simple reason that she saw what was taking place at the AEC hospital, and Colonel Fitzgerald considered her a security risk.