Although Justice Stevens has not disclosed his intentions, he has suggested he may announce as soon as next month plans to step down after 35 years on the bench, providing President Obama his second opportunity to shape the nation’s highest court. A new nomination could set off another charged ideological battle heading into the fall midterm campaign.  Wary of appearing presumptuous, the White House has avoided overt moves to prepare, but it already has long dossiers on a host of candidates after last year’s nomination of Sonia Sotomayor. If Justice Stevens retires, Democrats close to the White House said, the leading contenders will be three runners-up from last year: Elena Kagan, the solicitor general; Diane P. Wood, an appeals court judge in Chicago; and Merrick B. Garland, an appeals court judge in Washington.  The choice would depend in part on what kind of fight Mr. Obama is willing to wage amid other tough legislative battles. Energized if bruised from his campaign to overhaul the nation’s health system, Mr. Obama this year wants to push through energy, education and financial regulation measures, ratify an arms control treaty and make progress on immigration legislation.  A confirmation battle could not only provoke fresh skirmishing on longstanding issues like guns, abortion, race and terrorism; it might also generate new divisions stemming from constitutional challenges to Mr. Obama’s new health care program and a recent Supreme Court ruling guaranteeing the right of corporations and unions to spend unlimited amounts of money in candidate elections.  Mr. Obama may feel empowered to take on a fight. “The president now has health care behind him,” said Walter E. Dellinger III, acting solicitor general in the Clinton administration. “Though there are other major initiatives, there’s nothing comparable with health care to compete with this for expenditure of the president’s political capital.”  But he may still want to avoid conflict. “The wise way to do this would be to find someone who would be hard to be defeated,” said Senator Charles E. Schumer, a New York Democrat who shepherded Justice Sotomayor’s confirmation.  Justice Stevens, appointed by President Gerald R. Ford in 1975, turns 90 next month and is already the fourth-longest-serving justice in history. Leader of the liberal wing, he signaled his possible retirement last fall by hiring only one clerk for the term that starts this October, instead of the usual four.  He told The New Yorker on March 8 that he would decide within a month. He said three current clerks had volunteered to stay if needed. “So I have my options still,” he said. “And then I’ll have to decide soon.” Either way, he made it clear he wanted Mr. Obama to choose his successor: “You can say I will retire within the next three years. I’m sure of that.”  While a replacement for Justice Stevens most likely would not shift the ideological balance on the court, it could secure the seat for the liberal faction for years. But not all liberals are alike. The president’s base hopes he will name a full-throated champion to counter Justice Antonin Scalia, the most forceful conservative on the bench.  “In the Sotomayor case, they weren’t willing to take it on,” said Geoffrey R. Stone, a University of Chicago law school professor and former colleague of Mr. Obama’s who joined a group letter to the president last month urging more assertive judicial appointments. “I hope they’re willing to take it on now. In light of the health care vote, they have some momentum now.”  Other activists said Mr. Obama should not be deterred by the coming Congressional elections. “No matter who he chooses, the Republicans will use the issue to mobilize their base for the midterms,” said Nan Aron, president of the Alliance for Justice, a liberal advocacy group.  The candidates who would most excite the left include the constitutional scholars Harold Hongju Koh, Cass R. Sunstein and Pamela S. Karlan. Mr. Koh and Mr. Sunstein now work in the Obama administration while Ms. Karlan teaches at Stanford Law School. But none were finalists last year, and insiders doubt Mr. Obama would pick any of them now.  “If it were a Sunstein or a Koh, you would have all-out war,” said Curt Levey, executive director of the Committee for Justice, a conservative advocacy group.  The front-runner with the most support among liberals would be Judge Wood, who has opposed some abortion restrictions and is respected for standing firm against strong, conservative judges on the Court of Appeals for the Seventh Circuit. She and Mr. Obama were colleagues at the University of Chicago.  With no judicial record, Ms. Kagan is less known. As dean at Harvard Law School, she hired conservative professors to expand academic diversity and has supported assertions of executive power. But she stirred a furor by barring military recruiters because of the ban on gays and lesbians serving openly.  Judge Garland might be the safest choice. A former federal prosecutor now on the Court of Appeals for the District of Columbia Circuit, he is well regarded by Democrats as well as influential Republican senators like Orrin G. Hatch of Utah. But his careful jurisprudence stirs less enthusiasm among liberal activists.  All three were vetted last year, and Judge Wood and Ms. Kagan were interviewed by the president along with Justice Sotomayor. The fourth candidate interviewed was Janet Napolitano, the homeland security secretary, but her prospects may be marred by her comment after the attempted Christmas bombing of an American airliner that “the system worked.” She later explained she meant the system’s response after the attack, and she remains a favorite of Mr. Obama’s who has not been ruled out, a top official said.  The search, being led by the new White House counsel, Robert F. Bauer, may reach beyond the typical pool of appellate judges for a politician, Democrats said. Gov. Jennifer M. Granholm of Michigan was vetted last year, and Gov. Deval Patrick of Massachusetts is a political ally. On Capitol Hill, there is talk of Senators Richard J. Durbin of Illinois and Claire McCaskill of Missouri.  Thomas C. Goldstein, a Supreme Court litigator at Akin Gump Strauss Hauer & Feld and founder of the Scotusblog Web site, said the White House wanted to duplicate the success of the Sotomayor confirmation.  “There’s no diversity imperative here,” Mr. Goldstein said. “They can push whoever they want. But that doesn’t mean there aren’t diversity advantages. Appointing two women in a row I think they would view as a plus.”
The anticipated retirement of Justice John Paul Stevens in coming weeks could set off a charged battle with election undertones.