There's a similar arguement going on across the pond:
http://www.kten.com/Global/story.asp?S=5688199
http://www.kten.com/Global/story.asp?S=5688199
Almost every school has rule about mobilees so i am sure the OP's son broke the rules in this case. SO he should be prepared to pay the fine e.g. give up the phone for the month or whatever.
What's the problem?
And yes the world has gone mad , where a school believe it has the right to illegally hold onto someones property.