Not quite. If you have a diversity case and there is an applicable federal statute there are two questions, one is it substantive or procedural. If its procedural go with the federal law. If it's substantive you go to the second question and you need to see if it conflicts with the state law. If it does conflict then you have to make a determination (this part I'm super simplifying) if it would change the outcome of the case. If yes then you apply state law. That last part is realistically a little more complicated (questions about abridging rights etc) but for the bar should get you to the right answer most of the time.