The US Justice Department suit which was filed in the US District court in Detroit, is a procedural step that may ramp up pressure on Fiat Chrysler.
The suit could ultimately help lead to a settlement, as in an earlier probe of rival Volkswagen that will cost VW up to $25 billion (R330 billion), but which affected a much larger number of vehicles.
VW admitted to intentionally cheating while Fiat Chrysler denies wrongdoing.
It did not immediately comment yesterday. US-listed Fiat Chrysler shares were down 2.9 percent at $10.44.
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The suit also names Fiat Chrysler’s unit VM Motori, which designed the engine in question.