The panel's vote, which was the first of nearly a dozen reviews by state and federal agencies, means that commissioners found that the project doesn't meet with the legal requirements of the federal Coastal Zone Management Act and California's Coastal Act.
A vote in favor was critical to toll road supporters, who must now appeal the decision to the U.S. Secretary of Commerce to keep the project alive.
An estimated 3,000 people - surfers, environmentalists, commuters, union members and tribal members - showed up at the 14-hour hearing, some with surfboards in tow. A variety of signs read "Honk for Trestles" and "Highway from Hell" or "241 Toll Road: Drive Less. Live More."
Supporters argued that the 16-mile road was necessary to relieve crushing rush hour traffic where 125,000 cars pass each day between Orange County and San Diego. Studies commissioned by the Transportation Corridor Agencies, which finances and builds Orange County's toll roads, found that a 16-mile drive on Interstate 5 will take an hour by 2025 if nothing is done.