Chief Vick announces she took a job as Chief at a station up north in the bay area and will not be returning to the SBPD as chief. The group is shocked to hear this news. Lassiter, although saddened by this news, immediately sets his sights on being appointed as the new chief. Vick says she put in a good for him at the mayor's office, but can't make any promises. After Shawn, Gus and Lassiter say their goodbyes, Vick asks Juliet to speak with her in private. She asks Juliet to join her up north and serve as her head detective. Juliet knows this is a huge opportunity, but she needs time to think about it.
Mayor Swagerty interviews Lassiter for the Police Chief position, but Lassiter messes up the interview badly, leaving him almost no chance of getting the job. Desperate to make up for his comically tragic interview and to prove himself worthy of the job, Lassiter goes on a hunt to solve the murder of the Mayor's beloved uncle, Archie Baxter, who was killed back in the 60s but the case was never solved. Lassie gathers Shawn, Gus, Woody, Henry and Juliet and convinces them to help him solve this cold case together. Knowing how important this is to Lassiter and his career, they agree to it.
From there, the investigation plays out through a series of present day scenes that trigger flashbacks to 1967 in which each of our characters (Shawn, Gus, Juliet, Woody, Lassiter and Henry) play the part of a person who was involved in the Archie Baxter case. We start with the coroner from 1967 (played by Henry) doing an autopsy on Archie (played by Lassiter). Archie's blood alcohol content suggests he was moderately to severely intoxicated when he drove his car off a cliff. His death was therefore was deemed an accident.
Present day Lassiter says there's no way Archie was a drunk; in fact, he was a teetotaler. After Archie's car went off the road, a sky blue cadillac was seen driving away from the crime scene. Lassiter believes that whoever was driving that car, drove Archie off the road and wanted Archie's death to look like an accident. Lassiter finds a box of Archie's stored possessions and discovers Archie was a crime reporter. Also in the box is a photograph of “The Limelighter Lounge,” owned by the infamous mobster Rodney Caruso (played by Shawn). Lassiter thinks this photograph exists because Archie was staking the place out. Archie knew there was criminal activity going on at the lounge and he was going to be the one to expose it. Shawn takes a closer look at the photo and notices a couple of drunk cops outside the lounge. Lassiter finds it very odd that drunken police officers would be patronizing a mob joint in the middle of the day.
We then flashback to 1967. Archie heads to the SBPD to pay a visit to Chief Olsen Watt (played by Woody). He shows him the photograph of The Limelighter Lounge, but Watt thinks nothing of it and dismisses Archie's findings. But Archie persists and accuses Watt of letting his officers get tied up with the mob. Watt denies it and sends Lassiter on his way.
Present day Lassiter leads Juliet, Shawn and Gus to the now-abandoned Limelighter Lounge to find some more clues. Juliet says that Watt never once launched an investigation after Caruso; Lassiter finds this interesting...
Juliet wonders why Shawn is so keen on helping Lassiter solve this case. Shawn believes that if Lassie is promoted to Chief then Juliet will be promoted to Head Detective. Juliet doesn't tell Shawn about Vick's job offer to be her head detective in the bay area; she's still undecided and doesn't want to cause a stir just yet. Still at the lounge, the group comes across a wall of pictures. One is of Olsen Watt living it up at the lounge, and another is of Caruso with his smoking hot girlfriend Scarlett Jones (played by Juliet). They also see a picture of singer Miles Velour (played by Gus) performing at the lounge with his backup singers, The Velourettes. Lassiter thinks the picture of Olsen at the lounge confirms Olsen was somehow responsible for Archie's death. But Juliet points out that they have no physical evidence to prove it and that there is no one to question because everyone who worked at the lounge back in ‘67 are probably dead. But Gus steps in and says that there is someone still alive that could give them some answers: Melba Birdsong, one of Miles' Velourettes.
They head to Melba's house and she tells them Watt was clean; he was one of the good guys. He was only hanging out at the lounge to find a way to expose Caruso's criminal activity. It was Caruso that was the bad guy. She points out that Miles wasn't always truthful with Watt because Miles used to handle Caruso's money from time to time and he didn't want Watt to arrest him. Caruso found out that Miles had been using his money to gamble with, but Caruso didn't punish Miles because his girlfriend Scarlett loves his music and he didn't want to upset her. While Melba is explaining all of this, Shawn spots a picture of Miles and Melba standing in front of a sky blue cadillac; presumably the same sky blue cadillac that was seen driving away from the crash site where Archie died. From this, Shawn thinks it was Miles who killed Archie. Melba is sure it wasn't Miles who killed Archie, but Lassiter thinks otherwise.
Lassiter marches straight into the mayor's office to tell him the news about Miles being Archie's killer. But the mayor says it couldn't have been Miles because Miles was in Kansas City at the time of Archie's death. Lassiter's confidence shrinks. The mayor is not impressed and Lassiter fears he's messed up his chances at landing the job as Chief for good.
Back at the SBPD, Shawn notices that Scarlett Jones also appears in the photograph they found in Archie's box of possessions. Juliet finds out that Scarlett is still alive, so they bring her into the station for questioning. Scarlett tells them Archie was stumbling around the lounge drunk the night he died. She thought he died because he was so drunk that that he drove himself off a cliff. Her story is convincing, and Lassiter is left with no other clues to go off of. Perhaps Archie's death really wasn't murder after all...
That night at Juliet and Shawn's place, Juliet finally tells Shawn about the job offer from Vick. They discuss all the reasons why it would be good for her to stay in Santa Barbara, but Juliet is still left unsure about what she should decide.
That same night, Lassiter, while asleep in bed, is visited by Archie in a dream. Archie tells Lassiter that he was murdered, and that he had never had a drink in his life. He then tells him that Scarlett Jones had plenty of reason to lie and that he should question her again. Lassiter shoots out of bed and ponders this. He heads over to see Woody to talk it out. He asks him if there was anything else he found that could have accounted for Archie's level of intoxication. Woody says he had wondered the same thing, so he did a test. The test told him that Archie hadn't consumed any alcohol at all that evening. But Woody did, however, find something that suggested the presence of barbiturates in his system. Lassiter isn't sure what to make of this news.
The next day, Lassiter brings Shawn, Gus and Juliet back to The Limelighter Lounge to look for additional clues. Shawn eventually finds a secret door, and he leads everyone in. Inside, Lassiter realizes that Caruso's phones were tapped. Juliet points out that if Caruso's calls were being monitored, then there must be tapes with recorded evidence. Lassiter thinks he knows where to find them.
They head over to the mayor's house and find the tape hidden in Archie's personal belongings. They listen to the tape and hear Scarlett Jones' voice telling Miles that she's worried Archie is going to find out that she and Miles are having an affair and expose them. From this, our guys figure out that it was Scarlett Jones who was responsible for Archie's death. Archie had taken an incriminating photo of Scarlett and Miles together as lovers. Scarlett knew that if the picture got reported or ended up in the wrong hands, Caruso would find out about her and Miles' affair and have them killed. Scarlett slipped a drug into Archie's drink at the club and after he left, she followed him and ran him off the road to silence him for good. Scarlett is then arrested for Archie Baxter's murder and sent to prison for the rest of her life.
The Mayor is very pleased with Lassiter's investigative work and appoints him to be the Chief of Police for the SBPD. Lassiter is overjoyed, and tells the mayor that he promises he and his team will make him proud. But the mayor throws Lassie a curveball and says he has already assembled a team, and that his new head detective will not be Juliet. The new head detective he has hired is a woman named Betsy Brannigan. This news is bittersweet for Lassiter because he was going to ask Juliet to be his Head Detective.
The next day, when Lassiter breaks the news to Juliet, he tells her that he can't take the job as Chief of Police without having Juliet at his side as his head detective. Juliet knows that Lassiter needs to take this job; it's what he's been working his entire life for. In that moment, Juliet makes a decision and tells Lassiter that she is going to take the job Vick offered her up north.
Later that night, Juliet breaks the same news to Shawn. They discuss options, but ultimately they decide to try long distance for now and figure out a more permanent solution when the time is right.