I'm not going to go on for long here, but instead simply ask one question:
If an atheist can sue because the presence of celebrating God and religion in the public square is offensive to his values, then why can't I sue because the absence of celebrating God and religion in the public square is offensive to mine?
The truth is that Christianity celebrates the presence of God and Christians are commanded to celebrate and exalt Him in every place, public or private, and therefore, the atheist is attempting to dictate what commands, which a Christian believes to be from God, can or cannot be obeyed in the public square. But one either celebrates God's presence or removes that celebration. There is no middle ground, and that is why there is no such thing as the separation of church and state. You can either have the adoption of one philosophical worldview under which all other views either are tolerated (as when Christian ideals were implemented) or under which all other views are obliterated in tyranny (as in atheism, as seen in Russia, China, Cambodia, and now in the West). Which one seems best to you?