A rancher drives across his land in Boulder, Mont. The ruling in the Keepseagle case allows the formation of a trust that will help promote Native American farmers and ranchers in agriculture. (Thom Bridge/Independent Record via AP)

A federal judge on Wednesday approved the creation of what is expected to become the largest U.S. philanthropy serving Native American farmers and ranchers, redistributing $380 million left unclaimed in a landmark 2010 civil rights settlement in which the U.S. government agreed to pay for years of official discrimination.

Most of the $680 million in the 2010 settlement went unspent after far fewer people than expected brought successful claims. Instead of the 10,000 anticipated, only about 3,600 applicants were paid.

On Wednesday, U.S. District Judge Emmet G. Sullivan of the District approved an agreement reached in December over how to handle the remaining funds.

Under the new deal, those Native American farmers and ranchers will receive $21,275 in cash and tax payments on their behalf — about $77 million in all — atop the $50,000 apiece most received initially.

An additional $38 million will go to nonprofit groups chosen by lawyers who represented those in the class action, and the remaining $265 million will endow a Native American-led trust that will distribute money at its discretion to nonprofit groups over 20 years.

“The Court finds that with the creation of this Trust, governed by community leaders with relevant expertise, the process for distributing those funds will be fair, reasonable, and adequate,” Sullivan wrote.

If the judge had not approved the new plan, all of the leftover money would have been distributed in equal shares to nonprofit groups chosen by class attorneys, an outcome all sides opposed once it became clear that the sum would be vast.

Under the new terms, funds can be spent by the trust for business assistance, education and technical support to promote Native American farmers and ranchers in agriculture. Court documents also show that recipients can include new nonprofit groups as well as certain agencies of tribal governments.

In a statement, lawyers for lead plaintiff Marilyn Keepseagle, a North Dakota Sioux rancher, said they were pleased with the decision.

“Faced with limited realistic choices, we believe it was the best option available to favorably resolve this suit and provide additional direct relief to the class members,” while allowing the distribution of trust funds by “Native American leaders who understand the unique challenges of Indian agriculture,” said Marshall L. Matz and John G. Dillard of the Olsson Frank Weeda Terman Matz law firm.

[Native American farmers reach historic settlement with USDA ]

Lead class attorney Joseph Sellers of Cohen Milstein Sellers & Toll had argued for the change, saying it would serve the interests of an estimated class of 30,000 members, not only successful claimants.

Experts blamed the inability to distribute money under the initial agreement in part on the Agriculture Department’s failure to keep records of applicants who previously were denied loans and were eligible for a settlement, a history of skepticism in Indian country about federal promises, and the difficulty in reaching poor and isolated Native Americans in remote areas to identify wronged parties and make them aware of the settlement.

Those objecting to the new agreement included individuals who had tried to collect through the initial settlement but were denied and those who had never filed and were left out altogether.

Class representative Keith Mandan, a North Dakota rancher with the Hidatsa tribe, also opposed awards to what he called “undeserving third parties” instead of splitting the remaining money among successful claimants who proved they were victims of discrimination.

[Native American farmers and ranchers press USDA on bias complaints]

The suit filed in 1999 alleged that the Agriculture Department discriminated against Native Americans in loan programs from 1981 to 1999.

In a statement, Agriculture Secretary Tom Vilsack said, “We have worked hard to build a new era for civil rights at USDA, where all people are treated with dignity and respect. This decision is another positive step forward.”