A court-appointed psychiatrist has met with Malvo, 18, more than a dozen times in recent months and those conversations formed the basis for the motion, according to defense lawyers.
CBS News Correspondent Howard Arenstein reports defense lawyers "will undoubtedly try to prove that Malvo was brainwashed by elder sniper suspect John Allen Muhammad."
The prosecutor, Fairfax County Commonwealth Attorney's Robert F. Horan Jr., said he has seen the report compiled by the mental health experts hired by the defense. He rejected the idea that anything in the report supports a finding of insanity.
"It says absolutely nothing about insanity," Horan said. "Apparently it's a late-blooming insanity."
On Tuesday, prosecutors withdrew a motion to summon Malvo to testify in the case against Muhammad. Muhammad, 42, goes on trial next week.
Last week Malvo invoked his Fifth Amendment rights and refused to answer questions about his relationship with Muhammad. Malvo's appearance at the pretrial hearing brought the two suspects into the same room for the first time since their arrests one year ago.
After Tuesday's hearing, Muhammad's lawyers said Malvo's appearance last week was a stunt arranged by prosecutors to set up a confrontation between the pair and stir media interest in the case. During Malvo's 10-minute appearance last week, the pair made eye contact but showed no visible reaction to each other.
Malvo was summoned to the courtroom last week to determine if he would testify. The judge in the case had deferred a final ruling on whether Malvo might be required to answer certain questions until Tuesday's hearing.
Meanwhile, The Washington Post reported that Malvo told authorities that he and Muhammad used a stolen laptop computer and a global positioning navigation device to navigate around the Washington area and plot where they would strike next.
"You have the computer," Malvo reportedly said. "It's all on there."
Their maps allegedly included small skull-and-crossbones icons and smiley faces to pinpoint past and potential shooting locations.
Also on Tuesday, Judge LeRoy F. Millette Jr. rejected a defense motion to dismiss the charges against Muhammad as a penalty against the commonwealth for leaking information to Washington Post reporters who wrote a book about the sniper shootings.
Millette agreed with prosecutors who suggested the book's recent publication was actually a boon to the defense because it provided information to which they would otherwise not be entitled.
Millette also rejected some lesser sanctions alternatively proposed by the defense, including a continuance in the case; a prohibition on seeking the death penalty; and a prohibition from using the leaked evidence at trial.
Malvo and Muhammad are charged with 13 shootings, including 10 killings, during a three-week spree one year ago in Maryland, Virginia, and Washington, D.C.
Muhammad is to go on trial Oct. 14 in Virginia Beach. Malvo's trial is scheduled for Nov. 10 in neighboring Chesapeake. Both men could face the death penalty.