This is a bullshit headline, which is rather unworthy of the EFF.

The EFF isn't seeking data on the operation of the Automatic License Plate Reader (like LAPD internal documents on how the system should be configured or the protocols for handling data), it's seeking a week's worth of output from the information gathering system - presumably with a view to pointing out how many vehicles have had their license plates recorded.

The LAPD most certainly did not argue that all cars are under investigation. Rather they argued that:

a) such bulk data release would include information pertaining to criminal investigations, which is privileged from release; and

b) that such bulk data contains so much personally identifying information that it should not, by law, be made public. Yes, that means the LAPD has access to it and the general public doesn't; the the LAPD has institutional responsibilities and is subject to institutional oversight in a way that private actors are not. finally,

c) the EFF has already been given abundant data on how the system operates in accordance with CA public records request policies. Asking for the output of the system is superfluous.

This argument is completely counter to our criminal justice system, in which we assume law enforcement will not conduct an investigation unless there are some indicia of criminal activity.

Well, you know what they say about assumptions...our Constititution says that no warrants will issue without specific indicia. The EFF is basically arguing that the police must be blind until such time as a crime is reported; by this standard it would be illegal for an LAPD officer to observe or act on events in the street unless and until s/he had been dispatched to investigate a specific crime. In fact, police officers are entitled to observe public comings and going in search of patterns, or even to follow people on a hunch as long as they don't interfere with a person improperly, eg by searching without some probable cause. Observations are not the same thing as a search, nor do they by themselves comprise an investigation. Such observations don't interfere with Constitutional guarantees of freedom of assembly; it's a long-established principle that people do not have any expectation of privacy for their movements and behavior in public, but the EFF's position appears to be that government should be forbidden from storing any data about such movements.

I get that the EFF is saying that the LAPD shouldn't be able to engage in such bulk data gathering. But to claim that the LAPD considers itself to be investigating all cars in LA is twisting the department's argument into a pretzel. The EFF says:

Taken to an extreme, the agencies’ arguments would allow law enforcement to conduct around-the-clock surveillance on every aspect of our lives and store those records indefinitely on the off-chance they may aid in solving a crime at some previously undetermined date in the future. If the court accepts their arguments, the agencies would then be able to hide all this data from the public.

Well, no it wouldn't, but let's accept the similar premise that law enforcement would be able to conduct round-the-clock surveillance of every aspect of our public lives. The LAPD might keep that data confidential from the public, but they wouldn't be able to hide its use in a criminal case, which would be a violation of someone's civil rights.