I am an activist lawyer who has read many of Judge Sotomayor and Wood's opinions, and attended Harvard Law School while Elena Kagan was professor and then dean, and met her a few times. So I have real basis for my opinions.
At the outset all would make acceptable judges. But Kagen and Wood are clear progressives, Sotomayor has centrist pro-corporation tendencies.
Elena Kagan
I give my first choice to Kagan over Wood in part because at age 49 she is the youngest of the three. Another reason is she's probably several clicks to the left of the already solid Wood. Finally, Kagen is the intellectual super-star of the three, indeed of her entire generation.
When Kagan applied to be Justice Thurgood Marshall's clerk, she received the strong recommendations of Randell Kennedy, one of the first black law professors at Harvard, and Charles Nesson, a left-wing activist with solid radical opinions about drug laws and who is currently helping out the people getting sued by the RIAA for file sharing.
As she climbed up the academic ladder she developed friendly relationships with moderates and conservatives without compromising her principles. She has the intelligence and savvy with dealing with those to her right to craft opinions that will attract the vote of the Court's current swing justice, Kennedy, away from the Scalia-Alito-Roberts-Thomas block, and write white-hot dissents where she can't. I think she'd do better here than almost anyone in the country.
She has a warm, nerdy personality as well. I never took her in a class, in part because there were always a long waiting list for them. Like Obama, she was a student favorite.
A final word: I think we'll find out she's a very important "first" after she's securely in office. I won't go into further details here though, so please don't ask!
Diane Wood is clearly a better progressive choice than Sonia Sotomayor.
Both are fine federal judges, but on a the key issue of corporate fraud lawsuits, Diane Wood took the progressive pro-investor view, Sotomayor took the right-wing, pro-Wall Street view.
For this reason, I strongly prefer Judge Wood and would be highly disappointed if Sotomayor is Obama's nominee. Let's look at the two particular key cases that show where these judges stand on corporate fraud.
Judge Wood and the Tellabs case.
This case grew out of a law known as PSLRA, which had the strong backing of the corporate lobby because it potentially allowed corporate fraud cases to be dismissed more easily. It was a top priority of New Gingrich after he came to power, but was vetoed by Bill Clinton. Unfortunately, the combination of a Republican majority and pro-corporate Democrats like Dianne Feinstein made this one of the few instances where a Clinton veto was overridden.
In one of the first cases dealing with this issue, Judge Wood write an opinion that essentially limited the impact of this opinion. The alternative would have been to dismiss a case against the corporate crooks who ran Tellabs, and cooked their books in order to prop up stock prices and allow insider sales at inflated prices based on fake sales figures and "contracts" with bigger companies that never exists.
Wood's opinion was later overturned by the Supreme Court in a 8-1 decision, with only the Court's most liberal justice, Justice Stevens, voting to uphold Woods' opinion. It's sad that progressives lost here, but at least we fought, and I am glad this "we" includes Judge Woods. SHe went out on a limb for us, even though she knew there was a good chance she would be overturned, which judges of course don't like to happen.
Judge Sotomayor and the IPOs case
The single biggest case, from an economic standpoint, to come before Judge Sotomayor was another corporate fraud case, involving the situation in the 1990's where IPOs were deliberately underpriced, and allowing for insiders and investment bankers to allocate underpriced stock to favored cronies, and then reap huge one-day windfalls as they sold the stock after the IPO.
You can read the detailed, 413-page complaint describing the case .here
The defrauded investors were lucky enough to be assigned as their trial judge Shira Scheindlin, a Clinton appointee and one of the most progressive judges in the USA. Judge Scheindlin ruled the case could proceed as a class action, making it possible for small investors to actually fight a case against the big investment banks.
At that point the corporate defendants appealed, and Judge Scheindlin's decision was overturned by a three-judge appeals panel that included Judge Sotomayor.
Judge Sotomayor sided in this case against people defrauded by Wall Street, and in favor of the people who did the defrauding. She adopted the view of the US Chamber of Commerce, which filed an amicus curie brief. She let off the hook for a massive corporate fraud companies that included Goldman Sachs, Morgan Stanley, Bear Sterns, Lehman Bros., and Credit Suisse.
A lot of the focus of Supreme Court talk has been on social issues, especially abortion. It is these economic issues, however, that really divide Democratic judges. Wood has proven herself to be on the side of typical middle-class investors, Sotomayor, who was first appointed to the bench as a moderate compromise candidate by George H.W. Bush, proved herself on the side of Wall Street.