When applying state law, how does a federal court apply state law?

When applying state law, a federal court must apply the decisions of a state's highest court "unless it has later given clear and persuasive indication that its pronouncement will be modified, limited, or restricted." West v. American Tel. & Tel. Co., 311 U.S. 223, 236 (1940). When the high court has not addressed an issue, a federal court must look to the state's appellate court decisions, "unless it is convinced by other persuasive data that the highest court of the state would decide otherwise." Id. at 237.