So you probably see the following error trace within your Passenger log file if you got here:

[ pid=123 thr=1401414 file=ext/nginx/HelperAgent.cpp:964 time=2012-04-27 10:01:49.273 ]: Uncaught exception in PassengerServer client thread:
   exception: Cannot accept new connection: Too many open files (24)
   backtrace:
     in 'Passenger::FileDescriptor Client::acceptConnection()' (HelperAgent.cpp:429)
     in 'void Client::threadMain()' (HelperAgent.cpp:953)

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You can either

1. Lower the maximum number of running Passenger instances. Use passenger_max_pool_size within nginx configuration and the PassengerMaxPoolSize directive in Apache. See [http://www.modrails.com/documentation.html] Passenger documentation for details.
2. Increase the maximum number of open files per process. If you google around, don't get confused by the forum guys suggesting to look at cat /proc/sys/fs/file-max - this is the global maximum, an arbitrary won't be allowed to open that number of FDs. You will have to set limits within /etc/security/limits.conf in case you need that.