The family of Tanya Day, who died in custody in 2017, is suing the Victorian Government for false imprisonment and wrongfully causing the Yorta Yorta woman's death.
Ms Day was arrested for public drunkenness after falling asleep on a train. She was taken to Castlemaine Police Station where she hit her head multiple times.
She died in hospital 17 days later.
A lawsuit filed in the Supreme Court alleges that Ms Day's arrest was unconstitutional because public drunkenness laws are disproportionately applied to Indigenous people in Victoria, and are in violation of human rights conventions and the Victorian Charter of Human Rights.
It also says police failed to exercise due care for Ms Day after her arrest and their negligence caused her death.
Court documents also say that being an Aboriginal woman led to Ms Day's arrest and subsequent treatment.
They allege the state government had known of this impact of policing practices on Indigenous people since "at least 1991", the year the Royal Commission into Aboriginal Deaths in Custody handed down its findings and recommendations.
A 2019 coronial inquest found that Ms Day's death was preventable. The coroner found that police had failed to take proper care for Ms Days safety, security, health and welfare.
Earlier this year the Department of Public Prosecutions (DPP) said it would not lay charges against the police officers involved in Ms Day's death.
Speaking to NITV News at the time, Apryl Day said she would not stop fighting for justice for her mum.
For the rest of our lives we'll have to keep up this fight for mum because the way Aboriginal people are treated in this country is disgusting," she said.
"The Victorian Government and governments all around the country refuse to acknowledge what's happening in their own country and the rate that Aboriginal people are dying at the hands of police and within the prison system.
"We just don't want another family to go through what we've gone through because it feels like we've gone to hell and back.
"Mum deserves the justice that she should get, she deserved the respect and dignity that she didn't receive at that time from Victoria Police and so does every other Aboriginal person who has died at the hands of police."
The Victorian Government has since started to take steps towards decriminalising public drunkenness, with new laws expected to be active within two years.