Cucumber / Capybara Error: arguments[0] is undefined (Selenium::WebDriver::Error::JavascriptError)
Yes, the issue is with Firefox 35. Downgrade to version 34. Perhaps it's the way you went about downgrading. I simply ran the new DMG installer and confirmed overwriting the existing app.
Direct link: https://download-installer.cdn.mozilla.net/pub/firefox/releases/34.0.5/mac/en-US/Firefox%2034.0.5.dmg (link referenced from https://support.mozilla.org/en-US/kb/install-older-version-of-firefox)
More on this issue can be found here: https://code.google.com/p/selenium/issues/detail?id=8387
As Justin Ko commented, this is a bug with Firefox 35 and Selenium-WebDriver 2.44.0. The Selenium project has an issue ticket for it, and at time of writing, there is a pre-release gem (2.45.0.dev3) that includes the fix.