Rails routing error undefined local variable or method `with' for ApplicationController:Class

Rails routing error undefined local variable or method `with' for
ApplicationController:Class

I'm completely new to rails and I can't figure out why I'm getting this
error:
undefined local variable or method `with' for ApplicationController:Class
routing:
root 'home#index'
controller:
class HomeController < ApplicationController
def new
end
def index
end
end
app trace:
app/controllers/application_controller.rb:4:in
`<class:ApplicationController>'
app/controllers/application_controller.rb:1:in `<top (required)>'
app/controllers/home_controller.rb:1:in `<top (required)>'
I've updated some models and rspec code to test model validation, but
other than that I've created no other controllers/view/routes, etc.
Note: ruby 2.0.0, rails 4.0.0