We use the same image (circleci/build-image:ubuntu-14.04-XXL-upstart-1189-5614f37) and started running into the same error today.
Removing the /sbin/init command allowed the container to spin up. The tests initially failed because Postgresql was no longer running, but we were able to manually start it with
run: sudo service postgresql start. After this our tests passed again.
I don’t know why the container stopped running all of a sudden this morning, despite us having made no changes. But at least we’ve been able to work around the problem.