Katie,
While urine retention does happen to those of us with bladder cancer, it is not panic time; it is however time to seek immediate assistance. Your father in law is in the right place - the hospital - where he can be worked-up and his problem will be addressed.
Sometimes placing a catheter into the bladder produces no urine despite the feeling of a great urge to urinate (been there). There can be a number of reason for retention beside bladder cancer, including kidney and ureter blockages, up-stream from the bladder. The hospital doctors will find the immediate cause and provide him with relief. Moving surgery ahead can be a good choice in many situations.
The following is a link to a National Institutes of Health information booklet about the urinary system & problems, including a section on urine retention. I hope it is helpful.
www.niddk.nih.gov/health-information/urologic-diseases/kidney-stones
Best to your father in law,
Jack