Authorship of class notes
I guess my suggestion is to think carefully about what you want to achieve in this situation.  It doesn't feel especially righteous to suggest that you do a competent job of working on the notes, try to learn something and don't worry too much about precisely how much credit you will get out of the collective endeavor; however that sure seems to me like the right course of action.  For an original refereed publication, it's worth throwing a few elbows to make sure you get your fair share of credit (and even there it pays to be careful), but it doesn't sound like that's what we're discussing here.  

While I don't like saying that, I just can't think of what course of action is likely to actually improve your situation.  if you refuse to participate, you'll get a bad grade and make a poor impression (and such impressions do spread from one faculty member to another); I doubt he will really believe its due to high-minded concerns about authorship credit, as opposed to laziness.  If you make a fuss about getting credit before you've even written the notes, I don't think that will make an especially good impression either.  It wouldn't be right for the lecturer to publish the notes without appropriately crediting the class, but that wouldn't make suing him (or more realistically, making threats about suing) any less stupid. If it makes you feel better to separately post your contribution on a blog as well, knock yourself out.  Hopefully some people will read it and learn something. 

I think the productive thing to do is to try to meet the expectations of the class, and if later it seems that the faculty member is doing something shady with the results, you can go to your graduate director or another professor and express concerns about credit.  But complaining preemptively is not likely to achieve much.