He rejected an offer by city officials last year to allow him to kill chickens, which city law allows. The city said killing goats would violate local laws prohibiting animal cruelty, the keeping of livestock and disposal of animal waste.
In his ruling after a one-day trial, U.S. District Judge John McBryde said Euless was protecting the public's health by banning animal slaughtering within the city limits. He said Merced could do the rituals elsewhere.
"I'm a little surprised about it," Merced said. He said he might appeal the ruling.
Euless officials said they were pleased with the ruling, the Fort Worth Star-Telegram reported in its online edition Monday.
"Public health is one of the most compelling interests that cities protect," said Mick McKamie, the city's attorney for the case.
Believers say animal sacrifices are an essential devotion in Santeria, a religion born in Cuba by Yoruba slaves who fused elements of Roman Catholicism with beliefs they brought with them from Africa.