The ground-breaking class action, launched by Lex Wotton on behalf of Palm Islanders, claims alleged police failures after the 2004 death of Mulrunji Doomadgee were racially discriminatory.
At the first day of the Federal Court trial, barrister for the community Chris Ronalds SC said the declaration of an emergency, the subsequent raids and arrests without warrants were excessive.
She said children had guns pointed at them and witnessed family members being arrested by heavily armed officers who were flown in after the riots.
One man was raided while he was in the shower and Mr Wotton was tasered without warning in front of his young children, she said.
"Conduct of the police during the state of emergency is not something that is...conceivable anywhere else in Queensland other than a remote Aboriginal community," Ms Ronalds said during her opening address.
Counsel for the state of Queensland Mark Hinson QC said the parties disagreed on a number of factual points.
He said the riots had been much more serious than just the burning of the local police station and home of Mulrunji's arresting officer, Senior Sergeant Chris Hurley.
Conduct of the police during the state of emergency is not something that is...conceivable anywhere else in Queensland other than a remote Aboriginal community
"There were large numbers of Palm Island residents gathered, armed, threatening to kill police, demanding police leave the island," he said.
"For all intents and purposes, those people had a capacity to make good on those threats."
Other alleged failures by police included evidence from Aboriginal witnesses being unfairly discredited, a school bus being commandeered, with children subsequently forced to walk to school in the heat for a week, and Sen Sgt Hurley not immediately being stood down.
A coronial inquest into the death in custody in 2006 recommended criminal charges be laid against Mr Hurley. He was subsequently acquitted of manslaughter and assault charges in 2007.
However, a coronial inquest in 2010 accused the police service of colluding to protect their own and compromising proceedings.
...The report saw that the original investigation was "seriously flawed" and the investigating officers had "failed the people of Palm Island...
A by the Queensland corruption watchdog backed up those findings. It saw that the original investigation was "seriously flawed" and the investigating officers had "failed the people of Palm Island, the broader Indigenous community and the public generally".
It recommended disciplinary action against the investigating officers, but no action was taken by the Queensland Police Service.
The man behind the class action, Lex Wotton, served 20 months behind bars for inciting the riots.
Federal Court Judge Debbie Mortimer will consider whether the state of Queensland should pay compensation to the community, which has also requested a formal apology.
The four-week trial will be heard at the island's Bwgcolman Community School hall before moving to Townsville on September 28 and Brisbane later in the year.
