Can a teacher just up and decide to purposefully screw over an entire class?

I found out today that my soil mechanics teacher told the T.A. that grades ALL our lab papers, homework, and tests that it is time to start flunking people. Which is complete bullshit because just about the entire class is failing already. The class average for the first test was a 45 (highest grade 88) and the class average for the second test was a 50 (highest grade 80). My thing is that I want to guess I'm right at the average if not a little below of the entire class. The tests HARDLY cover the material we went over in class, and he absolutely refuses to curve anything including some of the most ridiculous homework ever assigned. My question is has anybody had a teacher like this and can give me an idea as to how he is going to determine who passes/fails this class? Is there a departmental/university rule on who passes or fails when most of the class is below a passing mark? The exam is weighted the same as the tests at 20%, and I have to make a 100 just to get a 70. I was thinking he would make the cutoff at the average of the class, but then I thought how the hell can he fail half the class especially when this class is only offered every other semester.

TL;DR How does a teacher determine who passes/fails when 80-90% of the class are not passing?