The Product Liability & Mass Tort Monitor is a monthly newsletter delivering critical updates, data insights and actionable strategies for navigating the complexities of product liability and mass tort litigation. McGuireWoods’ team of experienced litigators specializes in defending leading companies in high-stakes cases, using a deep understanding of clients’ products, businesses and regulatory environments. The newsletter highlights key data and trends shaping the product liability landscape, offering valuable insights to inform litigation strategies and risk management practices, aimed at helping clients stay ahead of evolving challenges and achieve favorable outcomes. This month’s issue explores an update on the malfunction theory in tort law and recent deregulation efforts by the EPA.
Malfunction Theory Update: The Limitation of Establishing a Defect by Inference
The “malfunction theory,” announced in Section 3 of the Restatement (Third) of Torts, gives plaintiffs a chance to establish the existence of a product defect through circumstantial evidence when direct evidence is unavailable and the circumstances create the inference that a defect is the most probable cause of the product’s malfunction. The theory, however, does not relieve plaintiffs of their burden to establish other elements, including the existence of the defect at the time the product left the manufacturer and causation of the harm sustained by the plaintiffs. The U.S. District Court of the Virgin Islands’ recent decision in Coates v. Ford Motor Co., highlights the high burden a plaintiff must meet to successfully invoke the malfunction theory and the circumstances that make the alleged inference of a product defect untenable.
In Coates, the owner of a 2002 Ford Explorer alleged that her airbag deployed spontaneously and caused her to crash into a hillside. The plaintiff blamed the airbag’s deployment on a defect in the car’s restraint control module (RCM), the device that controls airbag deployment. Ordinarily, the RCM would record the time of airbag deployment and establish whether it deployed before or immediately after the plaintiff impacted the hillside. The plaintiff’s RCM, however, failed to record any data related to the crash or the airbag’s deployment. Lacking direct evidence of the defect that caused the deployment of the airbag, the plaintiff invoked the malfunction theory and relied on the absence of RCM data to create the inference that a defect within the device caused the malfunction.
The age and prior crash history of the car, as well as alternative explanations for the proper deployment of airbags in the absence of crash data, cut against the existence of a defect with the RCM at the time the car left Ford’s hands. Based on these facts, the court found that no jury could reasonably infer that a design or manufacturing defect in the RCM caused the airbag to malfunction. Left only with her uncorroborated testimony that the airbags deployed before she crashed into the hillside, the court granted Ford’s motion for summary judgment and held that the plaintiff failed to offer any evidence that a defect within the RCM existed at the time Ford sold the car in 2002 and caused her airbag to malfunction.
EPA’s Deregulation Effort
On March 12, 2025, the EPA announced its intention to take 31 deregulatory actions in what EPA Administrator Lee Zeldin described as the “biggest deregulatory action in U.S. history.” The actions include the reconsideration of legal and scientific support for numerous environmental regulations promulgated under the Biden and Obama administrations with the goal of relieving the burden those regulations impose on the economy. By reducing — and in some cases eliminating — federal environmental regulations and shifting administrative enforcement to state environmental protection agencies, the EPA hopes to balance its directive to protect the environment with the key executive orders that outline the Trump administration’s economic initiatives, including unleashing American energy, lowering the cost of living for American families and advancing cooperative federalism.
McGuireWoods’ Product Liability and Mass Tort Group supports clients in assessing and mitigating risks, developing strategic responses to evolving laws and regulations, and defending litigation as it arises. The team is experienced in coordinating national defenses across a wide range of industries, including automotive, food and beverage, electronics, medical devices, chemicals, tobacco, pharmaceuticals, aircraft, trains, and building products, and handling toxic substance exposure and regulatory matters. Lawyers work closely with clients to navigate complex legal landscapes and protect their interests in high-stakes cases.