This is an abstraction of the error handling that I'm using on an API that I'm working on.

api_base_controller.rb

module Api
  module V1
    class BaseController < ActionController::Base
      class ::BMP::CompanyNotFound < ActiveRecord::RecordNotFound; end
      class ::BMP::Unauthenticated < StandardError; end

      doorkeeper_for :all

      respond_to :json

      rescue_from Exception, :with => :handle_exceptions

      def noop
        raise ActionController::RoutingError.new(params[:path])
      end

      def doorkeeper_unauthorized_render_options
        raise BMP::Unauthenticated
      end

      private

      def render_error(message, status)
        # Supress error codes in case
        if params[:suppress_response_codes] == "true"
          render :template => 'api/v1/base/error', :status => :ok, :locals => { :message => message, :response_code => Rack::Utils.status_code(status) }
        else
          render :template => 'api/v1/base/error', :status => status, :locals => { :message => message }
        end
      end

      # Handle exceptions
      def handle_exceptions(e)
        case e
        # Handling unauthorized attempts
        when BMP::Unauthenticated
          render_error 'You must be authenticated to use this API', :unauthorized
        # Handling exception when company not found
        when BMP::CompanyNotFound
          render_error 'Company Not Found', :not_found
        # Handling exception when record not found
        when ActiveRecord::RecordNotFound
          render_error 'Object Not Found', :not_found
        # Handling exception when there was no route that matched
        when ActionController::RoutingError
          render_error 'Endpoint Does Not Exist', :not_found
        else
          internal_error(e)
        end
      end

      def internal_error(exception)
        notify_airbrake(exception)

        if Rails.application.config.consider_all_requests_local
          raise
        else
          # Render a pretty page for production with an error message
          render_error 'A server error occured. The developers have been notified.', :internal_server_error
        end
      end
    end
  end
end

error.rabl

object false

node(:message) { @message }
node(:error_code, :unless => @error_code.blank?) { @error_code }
node(:more_info, :unless => @more_info.blank?) { @more_info }
node(:response_code, :unless => @response_code.blank?) { @response_code }