To close this out there was a red-herring in the debugging.
We were trying to add the app files without repulling from git. As a result we were adding the modfiied version of the files that CircleCI uses for tests (For those unaware CircleCI modifies the database.yml and a few other bits) the bundle install CircleCI ran also threw off our build.
To resolve once tests pass in our deployment phase we cd /tmp and re clone the repo from the appropriate branch and then run the docker build command there.