If after a knee repalcement the hospital called my father and told him that the instruments were not properly sterilized, what are his rights?

If he's not injured in some way--didn't pick up an infection; hasn't had to pay for additional medical treatment; etc.--then he cannot sue. Even though the hospital would be at fault for not sterilizing, the law does not provide compensation for possible or potential injury--only for actual injuries or losses. Therefore, if he is not injured, he cannot bring a lawsuit. (He may file a complaint with the state's medical licensing board, if he likes.)

If your father was injured or made ill, he may potentially sue for compensation for  his suffering and costs; he should consult with a malpractice attorney to discuss the case.