Yep, here teachers are allowed to look at anything they want to on your phone (call history, texts, pictures, etc.) and they will keep it for good if you get caught three times.
That used to be the policy at my school, after the third time the school got to keep the phone. Then a parent sued, and the policy is that a parent has to come get the phone after the third time. Personally I agree with the new rules. The school has no right to keep my personal property and never give it back.
Regarding the reading texts issue, that's why I keep a password lock on my phone. I got my phone taken away once, and my teacher demanded that I giver her the password, and I told her no, she tried to give me detention because I wouldn't let her read my texts. She got a formal reprimand from the principal and a letter from my family lawyer regarding a potential harassment lawsuit if she ever tried to pull crap like that again.
Teachers should have no right to read anything on a person's phone. They should get to take it and that's it. What I'm texting about is none of their business.
Don