I like the 3 strike system. Actually, I have ZERO tolerance for kids who feel they are above the law. I'd hammer them hard on the very first incident, but 3 strikes should make for a good compromise. On that 3rd strike, I'd have them sent to a reform school type environment. For how long? I don't know, or care. They can stay there and rot as far as I'm concerned. Lay down the law, and follow through with the punishment, and the rest of these punks will fall right in line.
I've seen the EXACT same students run rampant in one teacher's classroom, and behave like little angels in the classroom of a teacher who knew how to instill discipline. It would help enormously if they had suitable punishments at their disposal.