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IN THE UNITED STATES DISTRICT COURT 

FOR THE WESTEN DISTRICT OF TEXAS 

AUSTIN DIVISION 

HUSTON-TILLOTSON UNIVERSITY, § 

§ 

Plaintiff, § 

§ 

vs. § CIVIL ACTION NO. 1:20-CV-00192-RP 

§ 

SPRINT CORPORATION, § 

NEXTEL SPECTRUM § 

ACQUISITION CORPORATION, § 

and NORTHERN ARIZONA § 

UNIVERSITY FOUNDATION, INC. § 

§ 

Defendants. § 

PLAINTIFF’S ORIGINAL COMPLAINT 

Plaintiff Huston-Tillotson University (“Huston-Tillotson”) files this Original Complaint 

against Sprint Corporation (“Sprint”) and Sprint’s wholly owned subsidiary Nextel Spectrum 

Acquisition Corporation (“NSAC”) (collectively, “Sprint”), and Northern Arizona University 

Foundation, Inc. (“NAUF”), and would show as follows: 

THE PARTIES 

1. Plaintiff Huston-Tillotson is a nonprofit corporation incorporated in the State of 

Texas with its principal place of business at 900 Chicon Street, Austin, Texas 78702, and is thus a 

citizen of the State of Texas. 

2. Defendant NSAC is for profit corporation incorporated in the State of Delaware 

with its principal place of business at 2000 Edmund Halley Drive, Reston, Virginia 20191, and is 

thus a citizen of the State of Virginia and Delaware. NSAC is a wholly-owned subsidiary of Sprint 

and may be served through its registered agent for service, Corporation Service Company, 251 

Little Falls Drive, Wilmington, Delaware, 19808. 

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3. Defendant Sprint is a for profit corporation incorporated in the State of Delaware 

with its principal place of business at 6200 Sprint Parkway, Overland Park, Kansas 66251, and is 

thus a citizen of the State of Kansas and Delaware. Sprint may be served through its registered 

agent for service, Corporation Service Company, 251 Little Falls Drive, Wilmington, Delaware, 

19808. 

4. Defendant NAUF is a nonprofit corporation incorporated in the State of Arizona 

with its principal place of business at 620 S. Knoles, P.O. Box 4094, Flagstaff Arizona 86011, and 

is thus a citizen of the State of Arizona. NAUF may be served through its registered agent for 

service, Hufford Horstman Mongini Parnell & Tucker P.C., 120 N. Beaver Street, Flagstaff, AZ, 

86001. 

JURISDICTION AND VENUE 

5. This Court has subject matter jurisdiction over Huston-Tillotson’s claims because 

the amount in controversy exceeds $75,000 and complete diversity of citizenship exists between 

the Plaintiff and all Defendants. 28 U.S.C. § 1332. 

6. This Court has personal jurisdiction over all parties because Huston-Tillotson’s 

claims relate to and arise from wrongs committed by Sprint and NAUF pursuant to an Airtime Use 

and Royalty Agreement (the “Royalty Agreement”) that Sprint entered with Huston-Tillotson in 

Texas. As evidenced by the terms of the Royalty Agreement, it contemplates at least some 

performance by Sprint in Texas, and concerns property rights and airwaves located in Texas. 

Additionally, Sprint and NAUF have purposefully directed conduct in Texas by creating, or 

attempting to create, a business relationship with Huston-Tillotson concerning the property located 

in Texas, and have extended their services and products to customers and entities in Texas on a 

continuous and systematic basis. 

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7. Venue is proper in this judicial district pursuant to 28 U.S.C. § 1391(b) because a 

substantial part of the events or omissions giving rise to Huston-Tillotson’s claims occurred in this 

district, and the property giving rise to this dispute is situated in this district. 

FACTUAL BACKGROUND 

8. Huston-Tillotson is a Historically Black College and University located in Austin, 

Texas with an enrollment of approximately 1,100 students. Because of its status as an educational 

institution, the Federal Communications Commission (“FCC”) granted Huston-Tillotson a license 

to hold an asset then known as Instructional Television Fixed Service (“ITFS”). ITFS was a band 

of radio and television channels designed for educational institutions to deliver instructional 

television to students engaged in distance learning. Huston-Tillotson’s license operates under the 

call sign WLX254 in the FCC’s Geographic Service Area (“GSA”) for Austin, Texas. 

9. Due to widespread development of wireless broadband service, the FCC expanded 

ITFS usage to include high-speed internet access, and changed the name of ITFS to Educational 

Broadband Service (“EBS”). ITFS was an analog television-like service, while EBS is a broadband 

service, but both use the same 2.5 GHz spectrum bandwidth formerly associated with ITFS. 

10. Telecommunications companies are allowed by the FCC to lease excess spectrum 

capacity on EBS channels from nonprofit FCC licensees like Huston-Tillotson, to support the 

telecommunication industry’s commercial 3G, 4G, and 5G technology. As telecommunications 

have continued to rely more heavily on this 2.5 GHz “mid-band spectrum” to support their latest 

technology, the value of EBS channels has significantly increased over time. 

The Airtime Use and Royalty Agreement 

11. On January 7, 2005, Huston-Tillotson entered into the Royalty Agreement with 

Sprint. The Royalty Agreement provides Sprint a lease to use and operate a portion of the radio 

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and television spectrum rights that Huston-Tillotson owned under its ITFS license, and currently 

owns under its EBS license. This dispute arises out of Sprint’s wrongful conduct concerning the 

Royalty Agreement. 

12. FCC rules limited ITFS leases entered into before January 10, 2005 to a maximum 

term of fifteen (15) years, referred to by the FCC as “grandfathered leases.” Huston-Tillotson and 

Sprint originally entered into the Royalty Agreement on January 7, 2005. Pursuant to the FCC’s 

maximum 15-year limit on grandfathered leases, the Royalty Agreement was set to expire, and did 

expire, on January 7, 2020 (the “termination date”). 

13. Section II of the Royalty Agreement contains a Right of First Refusal provision that 

restricts Huston-Tillotson’s ability to assign or transfer any direct or indirect interest in HustonTillotson’s lease to a third party without first offering Sprint an opportunity to accept the same 

material terms or conditions. Section II(d) of the Right of First Refusal provision further restricts 

Huston-Tillotson’s ability to negotiate or contract with any third party while the Royalty 

Agreement is in effect. It states: 

While this Agreement is in effect, [Huston-Tillotson] shall not negotiate or contract 

with any third party to sell, assign, transfer or use, or to limit the sale, assignment, 

transfer or use, of the whole or any part of the ITFS Channels or Licenses involving 

any period during or after the time this Agreement is in effect. 

14. Section IV of the Royalty Agreement, entitled Royalty Fee, requires Sprint to pay 

royalties of approximately , and a total of approximately for the entire 

15-year term. Section IV(f), entitled Operator’s Right to Acquire ITFS Channels Authorizations, 

further provides that Sprint has a right to acquire Huston-Tillotson’s license “at any time this 

Agreement is in effect,” for approximately —substantially less than the total royalty 

payments for the maximum 15-year term. It provides: 

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Operator shall have the right to acquire the License(s) for the ITFS Channels at any 

time this Agreement is in effect, for 

. Operator may 

exercise such right itself or to assign such right to Operator’s designee. 

15. Section IV(g) provides that “[t]o exercise its assignment rights under Subsection 

IV(f) on one or more occasions, Operator or its designee shall give notice to Licensee at any time 

prior to the end of this agreement indicating the License rights Operator elects to acquire.” 

However, the Royalty Agreement makes clear that Sprint’s right to acquire Huston-Tillotson’s 

license does not survive the termination of the agreement. 

16. Section XXII of the Royalty Agreement expressly states that “Sections II, III, 

VII(d), XIV, XV, XVIII and XIX shall survive the ending of this Agreement, regardless of the 

cause of such ending.” Section IV governing “Operator’s Right to Acquire” is expressly omitted 

from the list of provisions that survive the termination of the agreement, which means Sprint’s 

right to acquire Huston-Tillotson’s license cannot survive termination of the Royalty Agreement. 

Section XXII of the Royalty Agreement also states that “[i]n the case of any provision in this 

Agreement providing a time for action, or which sets deadlines for performance (including a 

requirement of prompt performance), such time or deadline shall be deemed of the essence to the 

provision.” 

17. Section IV(f) itself expressly contemplates that any acquisition pursuant to 

“Operator’s Right to Acquire” must occur while the Royalty Agreement still is in effect, and may 

not occur after the Royalty Agreement terminates. For example, it says “[i]n the event of a purchase 

of all or the remainder of the License rights to the ITFS Channels, this Agreement shall terminate.” 

This contemplates a Royalty Agreement that still is in effect and not already terminated at the time 

of purchase. It further provides that “[i]n the event of any partial purchase of the License rights to 

the ITFS Channels, Operator may elect to either (i) terminate this Agreement, or (ii) continue this 

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Agreement.” This again contemplates that there still is an agreement in effect to terminate or 

continue at the time of acquisition. It also says that “[i]n the event this Agreement is continued 

after any partial purchase of License rights, (A) Operator shall retain the right to acquire the 

remaining License rights to the ITFS Channels in one or more purchases.” This again contemplates 

that the agreement has not terminated by its terms or by FCC rules at the time of acquisition. 

18. Indeed, not a single provision of the Royalty Agreement references or contemplates an 

acquisition of Huston-Tillotson’s license that occurs after the Royalty Agreement has terminated. 

Instead, the Royalty Agreement makes clear that Sprint has no right to acquire Huston- Tillotson’s 

license after the Royalty Agreement terminates on January 7, 2020. 

SoniqWave’s Third Party Offer 

19. On October 11, 2019, a few months before the termination date, Huston-Tillotson 

received an unsolicited letter of interest from a third-party named SoniqWave Network, LLC 

(“SonicWave”). SoniqWave offered to enter a royalty agreement worth over in annual 

royalty payments. SoniqWave also offered to enter a purchase option agreement that would 

purchase Huston-Tillotson’s license for over . 

20. SoniqWave’s offer provided substantially more compensation to Huston-Tillotson 

than the existing Royalty Agreement with Sprint. SoniqWave’s offer further demonstrated that 

Sprint’s 15-year-old Royalty Agreement contained royalty and acquisition payment amounts that 

were well-below market value and completely unreasonable for Huston-Tillotson to accept in the 

current EBS market. 

21. SoniqWave’s offer greatly interested Huston-Tillotson and would provide severely 

needed funding for Huston-Tillotson’s educational mission and infrastructure. However, the 

Royalty Agreement included a Right of First Refusal provision that prohibited Huston-Tillotson 

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from entering any negotiations or contract with any third party to sell, assign, transfer, or use 

Huston-Tillotson’s license while the Royalty Agreement was in effect. Fearing a breach of contract 

battle with one of the largest telecommunications companies in the United States, Huston-Tillotson 

awaited the January 7, 2020 termination date to commence earnest contract negotiations with 

SoniqWave. 

Sprint’s Proposed Short-Term Renewal Agreement 

22. On October 25, 2019, in an effort to extend the agreement with Huston-Tillotson 

past the termination date imposed by the FCC’s 15-year maximum term restriction, Sprint sent 

Huston-Tillotson a proposed short-term renewal agreement that would renew the Royalty 

Agreement for one year beginning on January 7, 2020. The short-term renewal agreement would 

have slightly increased the monthly royalty payments, and would have extended by another year 

Sprint’s right to acquire Huston-Tillotson’s license for . 

23. Huston-Tillotson clearly communicated to Sprint that Huston-Tillotson could not 

accept Sprint’s proposed renewal agreement because the proposed royalty and acquisition 

payments were well-below market value and did not adequately compensate Huston-Tillotson for 

use of its EBS license. 

24. In response, Sprint steadfastly refused to negotiate the terms of its proposed renewal 

agreement, and refused to increase the proposed payment amounts to adequately compensate 

Huston-Tillotson for the increased value of EBS license rights in Austin, Texas. Sprint did not 

account for the unequal marketing positions and inherent inequality of negotiations between a huge 

telecommunications conglomerate and small historically black university. 

25. Instead, on December 16, 2019, less than a month before the termination date, 

Sprint fully embraced the inequalities of its position and threatened Huston-Tillotson that it would 

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exercise its right to acquire Huston-Tillotson’s license if Huston-Tillotson did not immediately 

accept the short-term renewal agreement on the below-market terms that Sprint originally offered. 

Knowing that the Royalty Agreement would soon terminate, Huston-Tillotson refused to accept 

Sprint’s proposed below-market renewal. 

Sprint’s Ineffective Bad Faith Assignment 

26. On December 30, 2019, during Huston-Tillotson’s school holiday break and one 

week before the termination date of the Royalty Agreement, Sprint sent Huston-Tillotson a notice 

that it planned to assign Sprint’s rights and obligations to Northern Arizona University Foundation 

(“NAUF”). At the time, Huston-Tillotson had never heard of NAUF. Sprint did not provide any 

information about NAUF or NAUF’s capability to perform any obligations of Sprint as the 

Operator. And Sprint failed to obtain Huston-Tillotson’s prior written consent to assign rights or 

obligations to NAUF. 

27. Section XIII of the Royalty Agreement provides that Sprint may “sell, assign, 

delegate or transfer this Agreement or any of its rights or obligations hereunder to any entity 

demonstrating capability to perform the obligations of Operator hereunder.” It further provides 

that “Operator otherwise may not assign or transfer its rights or obligations under this Agreement 

without the prior written consent of Licensee, which consent shall not unreasonably be withheld, 

conditioned, or delayed.” Sprint, however, failed to provide any information to Huston-Tillotson 

demonstrating NAUF’s “capability to perform the obligations of Operator,” and Sprint never 

sought or obtained Huston-Tillotson’s written consent to any assignment or transfer to NAUF. 

28. Section VII of the Royalty Agreement provides that the “Operator will provide 

Licensee with shared access and use” of “the shared transmit antennas, combiner network, 

waveguide and other radio frequency equipment necessary to transmit the ITFS Channels.” It 

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further provides that “Operator shall cause the repair or the replacement of malfunctioning 

Transmission Equipment at its expense.” It also provides that “Operator shall provide Licensee 

with, or any access to, Transmission Equipment at the Transmission Site to the extent necessary 

for Licensee to comply with the minimum FCC requirements to program or use ITFS channels.” 

Sprint has failed to demonstrate that NAUF possess the capability of performing any of these 

obligations. 

29. Based upon publicly available information, NAUF has never demonstrated the 

capability to perform the obligations of Operator. Instead, NAUF has served as a strawman conduit 

that Sprint uses to strip small educational institutions of their EBS licenses. Sprint and NAUF do 

not readily disclose their strawman financial relationship. However, publicly available information 

indicates that Sprint has simply transferred money to NAUF so that NAUF can acquire EBS 

licenses from small educational institutions, and then lease those licenses right back to Sprint. 

30. Moreover, NAUF never performs the obligations of the Operator. Instead, NAUF 

serves as Sprint’s strawman that purchases EBS licenses with Sprint’s funding, then leases the 

licenses back to Sprint without ever performing any obligations of an Operator. NAUF’s 

consolidated financial statements plainly describe its strawman conduit role, and provides: 

the Foundation has entered into an agreement to purchase EBS licenses with initial 

funding of $15,000,000 from an outside corporation [Sprint]. Under the agreement, 

the Foundation purchases EBS licenses and then subsequently leases the licenses 

to [Sprint] the outside corporation.1

31. Sprint uses this strawman structure to circumvent FCC rules that prohibit 

commercial entities from holding licenses for Educational Broadband Service. Specifically, FCC 

rules provide that a license for an EBS station may be issued “only to an accredited institution or 

1 See Northern Arizona University Foundation, Inc. and Subsidiaries, Consolidated Financial Statements, June 30, 

2017, available at: https://nau.edu/wp-content/uploads/sites/61/2018/05/2017_Final_FS_NAUF_127280.pdf

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to a governmental organization engaged in the formal education of enrolled students or to a 

nonprofit organization whose purposes are educational and include providing educational and 

instructional television material to such accredited institutions and governmental organizations.” 

47 C.F.R. § 27.1201. 

32. There was never an attempt to demonstrate NAUF’s “capability to perform the 

obligations of Operator” under the Royalty Agreement. To the contrary, the Arizona Auditor 

General recently concluded that Northern Arizona University “inappropriately paid for $40,277 of 

the [University] President’s and her spouse’s travel expenses that conflicted with policies and 

lacked appropriate documentation, which put public monies at potential risk of misuse.” In 

response to the audit and reports of potential malfeasance, Northern Arizona University reported 

that NAUF ultimately covered the University for the inappropriate travel expenses.2

33. Further, Northern Arizona University recently reported that it missed its target 

enrollment by at least 800 tuition-paying students, resulting in $10 million in lost tuition and fees 

that have already been allocated. Reports indicated that departments across the university were 

ordered to return $11 million in funds before June 2019 to avoid ending the fiscal year with a 

deficit. 

34. Sprint’s strawman tactics for NAUF, reported malfeasance of NAU’s president, the 

$11 million shortfall in NAU’s budget, and NAUF’s propensity to cover NAU’s inappropriate 

expenses, raises legitimate concerns that NAUF is incapable of performing any obligations of 

Operator under the Royalty Agreement now or in the future. Accordingly, Sprint needed to obtain 

Huston-Tillotson’s prior written consent before attempting any purported assignment to NAUF. 

2 See Arizona Auditor General Report on Internal Control and on Compliance, Northern Arizona University, Year 

Ended June 30, 2019, available at: https://www.azauditor.gov/sites/default/files/NorthernArizonaUniversityJune30_ 

2019ReportOnInternalControlAndOnCompliance.pdf

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NAUF’s Failed Acquisition Attempt 

35. On January 3, 2020, just four days before the termination date, Huston-Tillotson 

received a letter from NAUF purporting to provide notice of its exercise of assignment rights to 

acquire Huston-Tillotson’s license. However, NAUF did not provide notice with sufficient time 

before the termination date to obtain FCC consent to any assignment whatsoever, let alone the 

acquisition of Huston-Tillotson’s license beyond the FCC’s 15-year term limitation. NAUF also 

failed to demonstrate that it possessed any capability to perform the obligations of an Operator. 

36. On January 7, 2020, the Royalty Agreement terminated pursuant to the FCC’s 15- 

year maximum term limitation. As of January 7, 2020, the Royalty Agreement ceased to have any 

force or effect except for certain described sections which survived termination. NAUF failed to 

obtain the FCC’s consent to any assignment of rights or obligations, failed to acquire HustonTillotson’s license, and failed to make any acquisition payment before the termination date. 

NAUF’s failure is significant because the Royalty Agreement makes clear that the right to acquire 

Huston-Tillotson’s license does not survive the termination of the Royalty Agreement. 

37. In addition, the proposed assignment agreement between Huston-Tillotson and 

NAUF itself states that the “assignment will not be effective until an application for such 

assignment has been filed and granted by the Federal Communications Commission.” Based upon 

the plain language of the Royalty Agreement and the proposed assignment agreement, NAUF had 

to obtain consent from the FCC before any assignment of rights or obligations in the Royalty 

Agreement could be effective or enforced against Huston-Tillotson. Accordingly, NAUF had no 

right, and continues to have no right, to acquire any portion of Huston-Tillotson’s EBS license. 

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Huston-Tillotson’s Right of First Refusal Notice 

38. On February 20, 2020, Huston-Tillotson sent Sprint a Right of First Refusal 

(“ROFR”) letter informing Sprint that Huston-Tillotson obtained a bona fide, unconditional, and 

continuing written third-party offer from SoniqWave to purchase Huston-Tillotson’s license. 

Huston-Tillotson further offered Sprint an opportunity to enter an agreement with HustonTillotson under the same material terms as SoniqWave ’s third-party offer. 

39. According to Section II of the Royalty Agreement, Sprint has forty-five (45) days 

from its receipt of the ROFR notice to inform Huston-Tillotson that it accepts the same material 

terms and conditions as those presented in the ROFR notice. If Sprint does not accept the offer 

within forty-five (45) days of receipt, then Huston-Tillotson may enter an agreement with the thirdparty under the same terms and conditions as the offer. 

CLAIMS FOR RELIEF 

First Claim for Relief – Declaratory Judgment 

40. Huston-Tillotson realleges and incorporates by reference all the paragraphs above 

into this claim for relief. 

41. Pursuant to the terms of the Royalty Agreement, Huston-Tillotson respectfully 

requests a declaratory judgment that Sprint and NAUF have no right to acquire Huston-Tillotson’s 

EBS license, and that Sprint must comply with the Right of First Refusal provisions of the Royalty 

Agreement in response to Huston-Tillotson’s ROFR notice. Specifically, Huston-Tillotson seeks 

a declaration that: 

a. The Royalty Agreement terminated on January 7, 2020; 

b. Sprint and NAUF have no right to acquire Huston-Tillotson’s license after the 

Royalty Agreement terminated on January 7, 2020; 

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c. Sprint and NAUF failed to promptly acquire Huston-Tillotson’s license before 

the Royalty Agreement terminated on January 7, 2020; 

d. Any right to acquire Huston-Tillotson’s license terminated on January 7, 2020, 

and did not survive the termination of the Royalty Agreement; 

e. Any obligation Huston-Tillotson had to cooperate with an acquisition of its 

license terminated on January 7, 2020, and did not survive the termination of 

the Royalty Agreement; 

f. Neither Sprint nor NAUF demonstrated that NAUF is capable of performing 

the obligations of Operator; 

g. Sprint failed to obtain prior written consent for any assignment to NAUF; 

h. Sprint failed to provide timely and adequate notice of assignment to NAUF; 

i. NAUF failed to provide timely and adequate notice of its exercise of a right to 

acquire Huston-Tillotson’s license and did not provide notice with sufficient 

time before the termination date to obtain FCC consent to any assignment; 

j. Sprint is subject to the terms of the Right of First Refusal in the Royalty 

Agreement; 

k. Unlike the right to acquire that terminated when the Royalty Agreement 

terminated on January 7, 2020, Sprint’s obligation to comply with the terms of 

the Right of First Refusal extends beyond January 7, 2020, and survives the 

termination of the Royalty Agreement; 

l. If by the forty-fifth day Sprint does not accept the same material terms and 

conditions presented in the Right of First Refusal notice, Huston-Tillotson may 

enter an agreement under the same terms and conditions presented in the notice. 

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42. This dispute presents a justiciable controversy that will be resolved by awarding 

declaratory relief because Sprint improperly attempted to assign Huston-Tillotson’s license to 

NAUF without obtaining Huston-Tillotson’s prior written consent, and has improperly attempted 

to acquire Huston-Tillotson’s license after the Royalty Agreement terminated. 

43. Huston-Tillotson requests a speedy hearing to resolve this action for declaratory 

judgment. 

Second Claim for Relief – Breach of Contract Against Sprint 

44. Huston-Tillotson realleges and incorporates all the paragraphs above into this claim 

for relief. 

45. Section IV(f) of the Royalty Agreement says Sprint only has the “right to acquire 

the License(s) for the ITFS Channels at any time this Agreement is in effect.” Sprint’s attempt to 

force an acquisition of Huston-Tillotson’s license after the final termination date is a breach of the 

agreement. Section IV’s structure and plain language support this interpretation because it provides 

that the lease shall terminate in the event of a purchase of all the license rights, and contemplates 

that the acquisition purchase occurs before the Royalty Agreement terminates. Section XXII 

further supports this interpretation by explaining that Section IV, governing the acquisition option, 

does not survive the termination of the agreement. 

46. Section XIII provides that Sprint may assign its rights in the agreement to “any 

entity demonstrating capability to perform the obligations of Operator.” However, neither Sprint 

nor NAUF provided Huston-Tillotson anything to demonstrate NAUF’s capability to perform any 

obligations of Sprint as the Operator under the Royalty Agreement. Absent a demonstration of 

NAUF’s capabilities, the Royalty Agreement provides that Sprint “may not assign or transfer its 

rights or obligations under this Agreement without the prior written consent of Licensee.” Sprint 

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failed to obtain Huston-Tillotson’s prior written consent and has thus breached the Royalty 

Agreement. 

47. Section XII of the Royalty Agreement provides that Sprint represents and warrants 

that “this Agreement has been duly executed and delivered by it and constitutes a legal, valid and 

binding obligation of it, enforceable against it in accordance with its terms except as such 

enforcement may be limited by insolvency laws, general principles of equity and FCC Rules.” 

Given Sprint’s repeated attempts to circumvent FCC rules and deprive Huston-Tillotson of its 

ability to negotiate payment for its license at fair market value, general principles of equity dictate 

that Sprint is prevented from forcing Huston-Tillotson into an approximately buyout 

when Huston-Tillotson has a valid purchase offer for over . Considering that Sprint is a 

large telecommunications company that operates over 70% of the EBS licenses in the U.S., and 

Huston-Tillotson is small college with just over 1,100 students, general principles of equity hold 

that Sprint’s bad faith conduct is unacceptable, and in material breach of the contract. 

48. Huston-Tillotson has satisfied all conditions precedent and obligations required by 

the Royalty Agreement. 

49. Sprint is in breach of the obligations imposed on it in the Royalty Agreement. 

Third Claim for Relief – Fraud by Nondisclosure 

50. Huston-Tillotson realleges and incorporates all the paragraphs above into this 

claim for relief. 

51. In its correspondence to Huston-Tillotson, Sprint represented that it “may assign 

any of its rights or obligations under the Agreement to any entity demonstrating capability to 

perform the obligations of Operator.” Subsequently, NAUF represented that Sprint “assigned its 

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rights under Sections IV(f) and IV(g) under the Lease to the Northern Arizona University 

Foundation.” 

52. However, neither Sprint nor NAUF disclosed to Huston-Tillotson that NAUF never 

intended to perform, and could not perform, the obligations of Operator. Neither Sprint nor NAUF 

disclosed to Huston-Tillotson that NAUF serves as Sprint’s strawman that purchases EBS licenses 

with Sprint’s funding, then leases the licenses back to Sprint without ever performing any 

obligations of an Operator. Neither Sprint nor NAUF disclosed that they use this strawman 

structure to circumvent FCC rules that prohibit commercial entities from holding licenses for 

Educational Broadband Service. 

53. Sprint and NAUF had a duty to disclose the full set of facts to Huston-Tillotson 

because they created a false impression by making a partial disclosure that NAUF is an “entity 

demonstrating capability to perform the obligations of Operator.” Sprint and NAUF have further 

created the false impression that the assignment of rights from Sprint to NAUF is effective and 

enforceable against Huston-Tillotson, when it is clear that the FCC has not granted consent or 

approval of any such assignment. Sprint and NAUF have also created the false impression that 

Huston-Tillotson has an obligation to assist NAUF in the assignment of rights when, according to 

Section XXII of the Royalty Agreement, the provisions concerning assignment (Section XIII) and 

any obligations to assist an assignment (Section IV) do not survive the termination of the Royalty 

Agreement. 

54. Sprint’s and NAUF’s failure to disclose the full set of facts is material because 

Section XIII of the Royalty Agreement makes clear that when a proposed assignee cannot 

demonstrate “capability to perform the obligations of Operator,” Sprint “may not assign or transfer 

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its rights or obligations under [the Royalty Agreement] without the prior written consent” of 

Huston-Tillotson. 

55. At the time of its partial disclosure to Huston-Tillotson, Sprint and NAUF knew 

that Huston-Tillotson was ignorant of the facts, and that Huston-Tillotson—a small college without 

extensive knowledge of backroom deals between Sprint and NAUF—did not have an equal 

opportunity to discover the facts in the time allotted by Sprint and NAUF. Because Sprint and 

NAUF sought to take advantage of this information asymmetry, Sprint and NAUF remained 

deliberately silent when they had a duty to speak. 

56. By failing to disclose the full facts, Sprint and NAUF intended to induce HustonTillotson to enter into an assignment, assist with the filing of an assignment, and ultimately 

acquiesce in an improper acquisition of Huston-Tillotson’s EBS license after the Royalty 

Agreement terminated and before NAUF ever obtained FCC approval to hold such acquisition 

rights. Sprint and NAUF further intended to induce Huston-Tillotson to refrain from acting in a 

manner that allowed Huston-Tillotson to obtain fair market value for its EBS license rights. 

Sprint’s and NAUF’s bad faith intent are evidenced by Sprint’s stated desire to deprive HustonTillotson of fair market value with a concocted scheme to buyout Huston-Tillotson’s EBS license 

after the FCC’s maximum 15-year term limit expired. 

57. Up until the filing of this lawsuit, Huston-Tillotson relied upon Sprint’s and 

NAUF’s non-disclosure by refraining from acting in accordance with its best interests, and 

entering negotiations or contracts with third parties that would provide fair market value for 

Huston-Tillotson’s EBS license. Huston-Tillotson further refrained from sending Sprint a Right of 

First Refusal notice because Sprint’s and NAUF’s non-disclosure created the false impression that 

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NAUF obtained an effective assignment and that NAUF obtained a right to acquire HustonTillotson’s EBS license before NAUF ever obtained FCC approval of any purported assignment. 

58. The improper conduct of Sprint and NAUF caused injury to Huston-Tillotson 

because Huston-Tillotson acted without the knowledge of the undisclosed facts and to date has not 

obtained (and has not entered a contract to obtain) fair market value for its EBS license. 

SPEEDY HEARING 

59. Pursuant to Federal Rule of Civil Procedure 57, Huston-Tillotson respectfully 

requests a speedy hearing to resolve its claim for declaratory judgment. 

CONDITIONS PRECEDENT 

60. All conditions precedent to Huston-Tillotson’s claims for relief have been 

performed or have occurred. 

DEMAND FOR JURY TRIAL 

61. Huston-Tillotson hereby demands a trial by jury. 

PRAYER FOR RELIEF 

WHEREFORE, PREMISES CONSIDERED, Huston-Tillotson respectfully requests that 

judgment be entered in its favor and against Sprint and NAUF as follows: 

 On Huston-Tillotson’s first cause of action, a speedy hearing and declaration that 

o Sprint and NAUF have no right to acquire Huston-Tillotson’s license; 

o Sprint’s attempted assignment to NAUF is ineffective without HustonTillotson’s prior written consent; 

o Sprint and NAUF failed to demonstrate that NAUF is capable of performing 

the obligations of Sprint as Operator; and 

o Sprint is subject to and must comply with the Right of First Refusal provisions 

in the Royalty Agreement if it wishes to acquire Huston-Tillotson’s EBS 

license. 

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 On Huston-Tillotson’s second cause of action, awarding compensatory relief for

Sprint’s breach of the terms of the Royalty Agreement and breach of the implied

covenant of good faith and fair dealing under the Royalty Agreement;

 On Huston-Tillotson’s third cause of action, awarding compensatory relief for

Sprint and NAUF’s fraud by non-disclosure that NAUF never intended to perform,

and could not perform, the obligations of Operator under the Royalty Agreement;

 For reasonable attorneys’ fees;

 For pre-judgment and post judgment interest; and

 Awarding Huston-Tillotson such other and further relief available under the law.

Dated: March 19, 2020 

/s/ Chanler A. Langham 

Chanler A. Langham 

State Bar No. 24053314 

clangham@susmangodfrey.com 

Armstead Lewis 

State Bar No. 24102089 

alewis@susmangodfrey.com 

SUSMAN GODFREY L.L.P. 

1000 Louisiana Street, Suite 5100 

Houston, TX 77002-5096 

Telephone: 713-651-9366 

Facsimile: 713-654-6666 

Daniel R. Malone 

dan@danmalonepc.com 

MALONE LAW FIRM 

P.O. Box 173144 

Arlington, Texas 76003 

Attorneys for Plaintiff Hutson-Tillotson 

University 

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CERTIFICATE OF SERVICE 

I certify that on March 18, 2020, a true and correct copy of this document was properly 

served on counsel of record via electronic filing in accordance with the USDC, Western District 

of Texas Procedures for Electronic Filing. 

/s/ Chanler A. Langham_ 

Chanler A. Langham 

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